fell below the 151 mark, the yen rebounded strongly. On October 22, the US dollar closed down 1.69% against the Japanese yen to 147.60, the largest single-day decline in more than two months, with a cumulative decline of about 0.71% this week, ending its previous nine consecutive weeks of upward trend.
In the morning of yesterday's North American trading session, affected by the strengthening of the US dollar, the yen fell rapidly, and the US dollar rose to 151.94 against the yen, hitting a new low in 32 years. Then the news came out of the market that the Bank of Japan intervened in the foreign exchange market. The Japanese yen exchange rate against the US dollar began to rebound, quickly rebounding to 146.16. Within an hour, rose by more than 3%, and finally closed at 147.23 yen.
Yesterday during the day, Japanese Finance Minister Suzuki Shunichi said at a regular press conference that he was strictly cracking down on speculators, "We cannot tolerate excessive behavior of speculators. We will use a high sense of urgency to make appropriate responses while observing the trends of the foreign exchange market."
That night, although some media confirmed that the Japanese government and the Bank of Japan bought the yen and sold the US dollar, they intervened in the foreign exchange market. But Japanese Ministry of Finance officials responded to media reports that they would not comment on whether the intervention was made.
On September 22, the Japanese yen exchange rate against the US dollar also briefly fell below 146. On the same day, the Japanese Ministry of Finance announced that it would interfere with the foreign exchange market and prevent the yen from further depreciating by buying and selling US dollars. This is the first time that the Japanese government has intervened in the foreign exchange market since 1998. The dollar exchange rate of against the yen closed down 1.14% on the day, but the yen quickly returned to its decline and hit a new low.
Market insiders pointed out that the strong rebound of the yen yesterday was not only related to the factors that the authorities interfered with the foreign exchange market, but also related to the high decline of the US dollar index . San Francisco Fed Chairman Daly said on the 21st that the Federal Reserve Bank of China should avoid the US economy falling into an "active downturn" because the rate hike of is too radical. It is time to start talking about slowing down the rate hike, but it is not sure when it will take place. Affected by this news, the dollar index, which measures the dollar against six major currencies, plunged in the session yesterday, closing at 111.9900 in the New York foreign exchange market.
Industry insiders believe that the differences in the US-Japan monetary policy are the fundamental factor that leads to the weakening of the yen this time. The Bank of Japan has always adhered to the yield curve control (YCC) policy, which is to control the 10-year Japanese bond yield to around 0% and tolerate its fluctuations of ±0.25%. It maintains super easing by controlling the 10-year government bond interest rate, thereby stimulating the development of the Japanese economy. However, against the backdrop of the Federal Reserve's continuous interest rate hikes, this policy directly caused the spread of the US-Japan to gradually expand, and investors sold the yen to buy the US dollar, pushing the yen exchange rate to continue to decline. Therefore, if the fundamental factors of the differences in monetary policy between the United States and Japan do not change, it will be difficult to reverse the exchange rate trend even if the Japanese government intervenes. If the Japanese yen exchange rate is truly reached, it still needs to wait for the market to ease its expectations for , the Federal Reserve's interest rate hike.
text/Beijing Youth Daily reporter Cheng Jie
edit/Fan Hongwei
