Source: thepaper.cn
There has been a big upheaval since the yen fell back to its 1990 low against the dollar last week.
In the morning of April 29, the yen fell all the way against the dollar, falling below 160 at one point, and rebounded sharply from its low against the dollar in the afternoon, rising as high as 154Ourbingo. 52 . The yen fell 1.72% against the dollar last Friday, attracting market attention.
Behind the huge volatility of the yen against the dollar on Monday, there was market news that the Japanese government had intervened in the market.
Makoto Kanda, deputy finance minister, declined to comment when asked whether the Japanese government had intervened in the money market, although some traders said they did intervene, the report said. "this looks like an intervention, but the level of intervention appears to be lower than the two interventions in 2022," said James Malcolm, head of foreign exchange strategy at UBS.
The last time the Japanese government intervened in the foreign exchange market was in September and October 2022, when Japan invested about $60 billion in intervention, when the yen was close to 146,152 against the dollar.
According to foreign media reports, the Federal Bank of Australia (Commonwealth Bank of Australia) said that Japan's Ministry of Finance is expected to release market intervention statistics from March 28 to April 26 on Tuesday.
The Federal Bank of Australia said today's volatility in the yen may reflect market unease in the face of illiquidity.
Previously, the Japanese authorities had repeatedly warned against "excessive" fluctuations in the yen, but did not make any official statement on boosting the yen.
On Friday, the BoJ decided to keep unsecured overnight lending rates in a range of 0% to 0.1%, before the yen depreciated further and fell below 158 against the dollar. Kazuo Ueda, governor of the Bank of Japan, said after the meeting, "Monetary policy does not directly target the exchange rate. But exchange rate fluctuations can have a significant impact on the economy and prices. If the trend of the yen has an impact on the economy and prices that cannot be ignored, it may become a reason for policy adjustment. " At the same time, he stressed that for now, the weak yen has not had a significant impact on potential inflation.
Wang Jinbin, a professor and associate dean of the School of Economics at Renmin University of China, analyzed to www.thepaper.cn that there must be a large amount of money entering the foreign exchange market if the yen has appreciated by about 2 per cent against the dollar in such a short time.
"OurbingoPersonally, I am more inclined to say that the Bank of Japan intervened, because from the perspective of market investment, when the market is shorting the yen as a whole, most people should not reverse the appreciation of the market. so I think the Bank of Japan still thinks that the 160 point still needs to be guarded, and the Bank of Japan's intervention in the yen should be a highly probable event. " Wang Jinbin said.
Hu Jie, a professor at the Shanghai Advanced School of Finance at Shanghai Jiaotong University and a former senior economist at the Federal Reserve, told www.thepaper.cn that the sharp fall in the yen today was still caused by a gap in market expectations for the trend of US dollar and yen interest rates. The decline was magnified by sentiment and caused some trouble for foreign exchange market participants. After the rebound, there is speculation that the intervention of the Bank of Japan is the result. While this possibility cannot be ruled out, I don't think the Bank of Japan is really worried that the yen is already too low against the dollar. If the central bank intervenes, it should be a way to calm the excessive sentiment in the market and avoid self-reinforcing emotions, resulting in excessive exchange rate fluctuations.
It is worth mentioning that the Fed will hold its latest interest rate meeting this week. But market expectations of a Fed rate cut have been delayed. Several experts or institutional personages told thepaper.cn that the timing of the Fed's rate cut could take place after September. Hu Jie believes that the yen interest rate will not rise further in the short term, the Fed interest rate cut will be delayed, these two factors will put pressure on the yen exchange rate in the short term.