Bank of Japan Suspected of Forex Market Intervention: Yen Hits 34-Year Low Exchange Rate

The Bank of Japan is suspected of having intervened in the foreign exchange market

The Japanese yen, which is considered one of the reserve currencies, renewed its 34-year low. April 29 Land of the Rising Sun currency be exchanged for 160.17 Euro.

according to Reuters, this was the highest value since 1990, when the dollar rose to 160.33 yen. However, later Japanese currency recovered 2.7% – to an intraday level at most 155.73 for 1 dollar. The yen also strengthened against the euro, pound sterling and the Australian dollar.

“This is a sign of serious intervention by the Bank of Japan,” said IG International financial markets analyst Tony Sycamore.

According to him, The Bank of Japan chose the right time to interveneas the country celebrates Showa Day, a national holiday, which allows you to get the most bang for your buck as Tokyo’s markets were closed for the celebration.

The last time the Japanese authorities made foreign exchange interventions in the market was in 2022, when they sold dollars into the market three times to support the national currency. Then $60 billion was spent to stabilize the exchange rate.

Globally, the fall in the yen has continued since the beginning of 2021, and in two years it fell 21% in price against the dollar. The main reason is that the Bank of Japan is keeping interest rates ultra-low, while the US Federal Reserve and other central banks of the world’s major economies are tightening their monetary policies to fight inflation.

In March, the Bank of Japan raising interest rates for the first time in 17 years, becoming the last of the major central banks to abandon their negative rate policy. The rate in Japan has been negative since 2016, but the regulator raised it from minus 0.1% to 0-0.1% annually. At the meeting on April 26, it was decided not to change the base rate.

As previously reported OBOZ.UA, Japan announced a ban on exports to the Russian Federation of 164 sectors products. Cars are subject to restrictions motor oil, hydrogen chloride, yachts and other pleasure and pleasure vessels.

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