TOKYO — The yen weakened to levels that preceded intervention by Tokyo last month, prompting new warnings by policymakers on Wednesday and a small but sharp bounce in the currency that underscored a jumpy market.
Banknotes of Japanese yen are seen in this illustration picture taken on Sept 23, 2022. TOKYO — The yen weakened to levels that preceded intervention by Tokyo last month, prompting new warnings by policymakers on Wednesday and a small but sharp bounce in the currency that underscored a jumpy market.
The yen touched the critical 160-per-dollar line for the first time since April 30, wiping out all gains made after a record amount of intervention by Japan in foreign exchange markets. The yen's sudden drop late in the afternoon put traders on guard for another possible move by Tokyo to defend the currency. Prime Minister Sanae Takaichi echoed comments earlier in the day from the finance minister that authorities stood ready to respond to exchange-rate moves.
"Speculative trading that is not based on real demand is having a big impact on the currency market," Takaichi said. The Ministry of Finance declined to comment when asked if the sudden jolt in the yen was the result of intervention. Chris Scicluna, head of economic research at Daiwa Capital Markets in London, said that while an intervention could not be ruled out, the moves so far had been modest.
"It could be that they have conducted a rate check to bolster the comments on the yen. We have to wait and see.
" Markets were skittish throughout the day ahead of a speech by Bank of Japan Governor Kazuo Ueda. The dollar-yen rate hit its session low after Ueda said the central bank's basic stance is to continue raising its policy rate. A key question for markets is whether fiscally dovish Takaichi and her government are on board with further tightening by the central bank.
Finance Minister Satsuki Katayama said on Wednesday that she is largely aligned with the BOJ governor on various aspects, adding that Ueda and Takaichi held "very constructive discussions" in a recent meeting. Data on Friday showed that Japan spent 11.7 trillion yen since April to support the yen in what was the largest-ever intervention round in a month.
The currency slid to a near two-year low of 160.725 per dollar on April 30 before jolting to as strong as 155 in what is believed to be multiple bouts of yen-buying intervention. But the currency has ground weaker ever since, spurring expectations of further action by Tokyo to defend its currency. Yen-buying intervention requires selling foreign assets, of which Japan held about $1 trillion at the end of April.
"Intervention odds click above zero as 160 nears and click substantially higher if 162 trades," Brent Donnelly, president at analytics firm Spectra Markets, wrote in a note. The three-month-long Middle East crisis has hit Japan's economy and currency particularly hard, as the nation imports most of its oil and must pay for it in dollars. That exacerbated an already weakening trend in the yen amid the BOJ's cautious approach to raising interest rates and expectations of expanded fiscal stimulus.
Previous Japanese administrations have focused on the speed of change in markets in deciding whether to intervene, but Takaichi's government appears more centred on defending key levels.
"I think they have successfully put in the minds of market participants that 160 is where we've got to be careful," said Bart Wakabayashi, branch manager at State Street in Tokyo. "They have definitely put 160 in neon as a level where we're going to see increased jawboning and tension. "
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Tropical storm Jangmi injures 9 in Japan, thousands without powerPublic transport in Tokyo and nearby cities could face disruptions as the storm approaches.
Read more »
8 crested ibises released in Japanese town decades after extinction in JapanTOKYO — Eight crested ibises were released into the wild in a north-central Japanese town, decades after the birds went extinct in the country.The endangered birds took off from each of their wooden cages at a ceremony Sunday (May 31) in Hakui city in the Noto region, where they were last seen in the wild.Residents cheered when the birds soared...
Read more »
A bear injures 4 people in a residential area of Japan as the annual number of attacks risesTOKYO — A bear injured four people in a Japanese residential area on Tuesday (June 2) in the latest case of an attack by the animals in an area of the country where bears have increasingly encroached on the human population in recent years.Japan's Environment Ministry said 13 people were killed in more than 230 attacks by bears in 2025,...
Read more »
SIA flights between Singapore and Japan's Nagoya, Osaka, Tokyo retimed due to Typhoon JangmiNational carrier Singapore Airlines (SIA) on Tuesday (June 2) announced the retiming of its flights operating to and from Nagoya, Osaka and Tokyo due to weather conditions caused by Typhoon Jangmi.
Read more »