Yen-Dollar Exchange Rate Surpasses 148 Yen, Japanese Finance Minister Hints at Verbal Intervention

Yen-Dollar Exchange Rate Falls to 148.95 Yen Intraday
Japan, US, and Other Foreign Authorities Share Exchange Rate Issues
Finance Ministry Closely Monitoring Exchange Rate Market Fluctuations

The yen-dollar exchange rate recorded the high 148 yen range on the 26th, marking its lowest point in 10 months, prompting the Japanese foreign exchange authorities to resume verbal intervention.

According to the Nihon Keizai Shimbun on the 26th, Japanese Finance Minister Shunichi Suzuki stated at a press conference held after the Cabinet meeting that if the current trend of yen depreciation continues, "we will not rule out any options and will take appropriate measures."

Minister Suzuki also emphasized that they are sharing with overseas authorities, including the United States, the view that "excessive (exchange rate) fluctuations are undesirable" in relation to the decline in the yen's value.

Regarding the current dynamics of the foreign exchange market, he said they are closely monitoring the situation and reiterated the remarks made during the previous verbal intervention. Earlier, on the 20th, the Japanese Ministry of Finance announced that it would take appropriate measures without ruling out any means against excessive exchange rate fluctuations. He said, "We will not add any new policies beyond what was mentioned last time," but added, "Since exchange rates are determined by market fundamentals, we are watching the market with high tension."

Bank of Japan (BOJ)

On that day, in the Tokyo foreign exchange market, the yen's value against the dollar was trading at 148.84 yen as of 2:07 p.m. During the morning session, the yen's value fell to 148.95 yen at one point, marking its lowest point in 11 months since October last year. As expectations grew stronger that the U.S. Federal Reserve (Fed) would raise interest rates once more within the year, the interest rate gap between the U.S. and Japan widened, increasing selling pressure on the yen.

As a result, concerns are spreading in the market that the Japanese government will intervene in the foreign exchange market. The Bank of Japan (BOJ) intervened in the market on September 22 last year when the yen-dollar exchange rate reached an intraday high of 145.898 yen. Compared to that high, the current yen value is about 3 yen lower.