Due to the weak Japanese yen, foreign exchange authorities verbally intervene... "No option is off the table"

Yen Value Drops to 147.79 Yen
Foreign Exchange Authorities Identify Speculative Moves as Cause
"Monitoring Market Closely with Caution"

The value of the Japanese yen fell to its lowest level in 10 months, prompting the previously silent Japanese foreign exchange authorities to finally engage in verbal intervention.

According to Kyodo News on the 6th, Masato Kanda, Director-General of the Japanese Ministry of Finance, told reporters that if the current trend of yen depreciation continues, "we will not rule out any options and will respond appropriately."

Regarding the yen-dollar exchange rate, Director-General Kanda said, "It goes without saying that it is desirable for the exchange rate to reflect fundamentals and show a stable trend. However, looking at the current situation, there are speculative movements that cannot be explained by fundamentals."

He added, "The yen depreciation phenomenon brings uncertainty to companies and households and adversely affects the economy," emphasizing that they are closely monitoring the foreign exchange market with vigilance.

Earlier that day in the Tokyo foreign exchange market, the yen-dollar exchange rate surged to 147.79 yen at 9:55 a.m., marking the lowest level since November last year. This is even higher than the intraday high of 145.898 yen on September 22 of last year, when the foreign exchange authorities first intervened in the market. The current exchange rate has already surpassed that previous high.

Pressure to sell the yen increased as expectations grew that the U.S. Federal Reserve (Fed) would prolong its tightening policy. Additionally, Saudi Arabia announced it would extend its oil production cut policy until the end of the year, causing international oil prices to surpass $90 for the first time since November last year, fueling concerns about a rebound in inflation. The previous day, the U.S. 10-year Treasury yield also rose to an intraday high of 4.268%, the highest since May 25, widening the interest rate gap between the U.S. and Japan.

Market forecasts even suggest that the yen could fall to as low as 155 yen per dollar within six months. On the 29th of last month, Goldman Sachs predicted that if the Bank of Japan (BOJ) maintains its dovish stance favoring monetary easing, the yen's value could drop to 155 yen. Initially, Goldman Sachs had forecasted the yen to rise to 135 yen, but this forecast was revised downward. The previous lowest yen-dollar exchange rate was 160.35 yen, recorded on April 2, 1990.