THE ASAHI SHIMBUN
May 1, 2024 at 14:53 JST
An electronic stock board shows the yen-dollar exchange rate on April 30 in Tokyo. (AP Photo/Eugene Hoshiko)
Japan used around 5 trillion yen ($31.7 billion) for a suspected intervention on April 29 that prevented the yen from sliding further into 160-yen territory, according to an estimate by market players.
The government has not revealed whether it intervened, but speculation is rife that a yen-buying, dollar-selling intervention halted the sharp decline in the Japanese currency that day.
The yen fell to the 160-yen level against the dollar in Asian trading for the first time in 34 years on April 29, when Tokyo markets were closed for a national holiday.
But the yen soon bounced back to the mid-154-yen level.
Yen-buying continued intermittently whenever the currency appeared to be returning to a weaker direction.
For foreign exchange interventions, the Finance Ministry instructs the Bank of Japan to buy or sell currencies to or from private financial institutions.
As a result, the BOJ’s current account balance decreases. The official final balance is released two business days later.
The central bank, however, also discloses estimates for the balances.
The BOJ’s forecast released on April 30 for the May 1 final amount showed a decrease of 7.56 trillion yen for “fiscal and other factors,” a category that includes interventions.
Central Tanshi Co., a private-sector, short-term investment company, had earlier forecast a decrease of 2.05 trillion yen in the BOJ’s current account balance.
The difference between the estimates of the company and the BOJ is about 5.5 trillion yen, and trading sources said this was likely around the size of the intervention on April 29.
In three interventions in 2022 to prop up the yen, a total of about 9 trillion yen was spent.
The yen was trading at 156.85-87 against the dollar at 5 p.m. in Tokyo on April 30, 15 yen weaker than at the same time on April 26.
The Finance Ministry will announce whether it intervened on April 29 at the end of May.
(This article was written by Ayumi Sugiyama and Junichi Kamiyama.)
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