yen fluctuated sharply again today, and the market speculated that the reason may be that , the central bank took action again.
On the morning of October 24, when the Japanese market opened, the Japanese yen exchange rate against the US dollar was about 149.71 yen, hovering near the 32-year low, but within a few minutes of 8:44 local time, the yen exchange rate against the US dollar exchange rate soared to 145.56 yen. It is reported that Japan may have launched a third round of foreign exchange market intervention.
Before the opening, Japanese Finance Minister Suzuki Shunichi said at a morning press conference that Japan is in a firm confrontation with speculators and cannot tolerate excessive fluctuations in the currency.
The sharp trend of the yen today shows that the authorities have gone all out in the confrontation to defend the yen. But it is difficult to confirm that these interventions have significant effects, because just in the afternoon, the yen returned to the level before the start of the morning session.
Although the yen fluctuated violently, the Japanese side did not comment on this. Japanese currency senior official Kada Masato said:
I will not comment on whether I have intervened.
As I said before, we will take appropriate measures for excessive actions, 24 hours a day, 365 days a year, 24 hours uninterrupted.
CICC believes that the Japanese authorities may deliberately refuse to announce the official announcement to improve the opacity of foreign exchange intervention, so as to allow the market to be alerted to the possibility of foreign exchange intervention and increase the deterrent force at any time.
Since September this year, the Bank of Japan has conducted two exchange rate interventions, and this is likely to be the third intervention.
Last Friday, after the Japanese trading hall had been closed and the U.S. dollar-yen trading was in a low liquidity period of the day, the Bank of Japan implemented a buy yen operation, and traders estimated that its size was about US$30 billion. The move pushed the yen to surge against the US dollar from 151.94 yen to 144.50 yen for 1 dollar. Previously, the Japanese government used US$20 billion to interfere in the foreign exchange market on September 21.
It is worth noting that most of the Bank of Japan's "intervention" targets since this year seem to have pointed to overseas funds. Because data compiled by Bloomberg shows that of the 23% decline in against the US dollar this year, more than four-fifths of the declines occurred in overseas markets.
Kiyoshi Ishigane, chief fund manager at Mitsubishi Asset Management in Tokyo, believes that this strategy is exactly the same as when it is traditionally intervened with overseas collaborative intervention, although this time the action is unilateral:
This may subtly increase its influence on the market.
This shows that when is undergoing overseas intervention, Japan has obtained approval from the local government . This is actually a coordinated intervention that has a significant impact.
However, while Treasury Secretary Shun Suzuki said earlier this month that policymakers have worked to gain an understanding of Japan's actions from the United States and other countries, there is no indication that it is close to reaching a deal to coordinate actions to control the strong dollar.
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