September 27, 2022 20:10 PM
Bank of Japan Governor Haruhiko Kuroda.
[Finance News Agency]According to media reports on Monday, Japan’s currency brokerage companies estimated that the scale of foreign exchange intervention by Japanese authorities last Thursday could be as high as 3.6 trillion yen.
The Japanese government and the Bank of Japan implemented foreign exchange intervention measures on Thursday (22nd), selling dollars to buy yen for the first time since June 1998.
Japan may have spent a record 3.6 trillion yen ($25 billion) last Thursday, surpassing the previous record of 2.6 trillion yen set in 1998, according to estimates by a Tokyo money market brokerage.
The intervention of the Japanese authorities shows the outside world that Japan is determined to curb the rapid depreciation of the yen.
In Thursday’s intervention, the BOJ bought yen from commercial financial institutions and sold them dollars on behalf of the government, with payments due on Tuesday.
About 3.6 trillion yen is expected to be transferred from financial institutions’ accounts to the government at the time of settlement on Tuesday, the Bank of Japan’s daily money-flow statistics released late Monday showed.
BOJ Governor Haruhiko Kuroda said last week in a news conference that the BOJ was unlikely to change its rate guidance for “two to three years”.
But he backtracked on Monday, saying “it’s not going to be as long as two or three years,” suggesting that rate guidance could change depending on how long it takes for the economy to improve.
Although last week’s intervention temporarily curbed the yen’s decline, the US dollar against the yen (USD/JPY) has gradually climbed back to the level before last Thursday’s foreign exchange intervention, and is now at 144.38.