The Japanese government intervened in the currency market for the first time in 24 years in an attempt to save the yen's depreciation.

(Reuters file photo)

[Financial Channel/Comprehensive Report] In order to attack the yen vulture, the Japanese government and the Bank of Japan intervened in the foreign exchange market last Thursday (22nd), raising the yen from 1 US dollar to 145 yen in one fell swoop to 1 US dollar to 140 yen.

According to sources, the scale of intervention on that day was as high as 1 trillion yen (about 220 billion Taiwan dollars), which was also the first time Japan launched foreign exchange intervention measures in 24 years.

Nikkei Asia reported that the Governor of the Bank of Japan Haruhiko Kuroda announced on the 22nd that he would maintain an easing policy. The outside world judged that the yen may drop to 146 yen per US dollar. The result was unexpected by the market. Around (4:00 p.m. Taipei time), the yen originally fluctuated at a low level of 145.7, and instantly turned to appreciation.

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The stop of the yen's depreciation was mainly motivated by the intervention of the Japanese government, and the yen soon rose from around 145 yen per dollar to around 140 yen.

Japanese banks said it was a counterattack aimed at speculative money that had been selling the yen.

The source added that the scale of the intervention that day reached one trillion yen.

According to the report, as of the end of August, Japan's foreign exchange reserves stood at about $1.29 trillion, which seemed to be abundant.

However, based on past experience, the effect of intervention is limited.

In 1998, Japan intervened in April and June in order to save the yen's depreciation, but the yen's depreciation stopped only when Russia suffered a financial crisis in August of that year, which shows that the intervention of the Japanese government did not change the exchange rate trend.

The Japanese industry gave positive comments to the foreign exchange market intervention, and the hedge fund warned that the more irrational actions are, the easier it is to catch loopholes, and may cause the Japanese government to fall into a quagmire.

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