Japan Intervenes in Foreign Exchange Markets as Yen Slides to Four-Decade Low
Japan intervened in foreign exchange markets on Thursday to prop up its yen currency, a market source said. This move comes ahead of the Bank of Japan's policy decision on Friday, where interest rates are expected to remain steady at 1%. The intervention is seen as an effort to stabilize the yen, which has been sliding due to the impact of the Iran war-driven energy shock and rising living costs.
The Japanese government has been warning of action for months to address the yen's weakness, which has reached a four-decade low. Finance Minister Satsuki Katayama declined to comment on whether Tokyo intervened, but hinted at U.S. involvement in the effort to stem the yen's decline. Atsushi Mimura, Japan's top currency diplomat, said that the country is receiving support from the United States, including rate checks by the Federal Reserve.
The dollar sank to a more than two-month low against the Japanese yen on Thursday, indicating official intervention. After hitting 159.22 per dollar, the yen resumed its decline in Asia and stood at 160.07 on Friday. Markets are shifting focus to how hawkish BOJ Governor Kazuo Ueda could be on the future rate-hike path.