Zhitong Finance APP learned that Japanese yen observers in Tokyo continued to speculate whether Japanese authorities intervened secretly last week, focusing on the exchange rate fluctuations that occurred after the United States released inflation data that exceeded expectations last Thursday.
According to an estimate, Japanese authorities may have used about 1 trillion yen (about $6.7 billion) to support the yen, a figure that comes from the Bank of Japan's higher-than-expected daily current account deficit. That would be slightly higher than a third of the 2.84 trillion yen expenditure in September, when Japan intervened in the foreign exchange market for the first time since 1998 to support the yen.
Last Thursday, the dollar-JPY exchange rate plummeted from around 147.67 to a low of 146.50 after the United States released inflation data that exceeded expectations, and then rebounded. An official from Japan's Ministry of Finance declined to comment on a possible second intervention on Monday, saying the data will not be released until February next year.
After the U.S. released inflation data that exceeded expectations, the dollar-yen exchange rate fluctuated sharply
General manager of currency brokerage Central Tanshi Co. said it was difficult to determine the exact factors that triggered changes in the Bank of Japan's account data, but "if intervention is conducted on October 13, it can be speculated that the amount of intervention is around 1 trillion yen."
Japanese official in charge of foreign exchange affairs, Masato Kanda, said last month that the government is ready to take action and may conduct secret intervention. He also said that Japanese authorities may not necessarily confirm each intervention.
Secret intervention usually means that the government is involved in the market with a smaller scale of funds, which is difficult for investors to detect.
On Monday, traders remained highly alert to possible interventions after the yen exchange rate hit a 32-year low and approached a key psychological threshold of 1 dollar to 150 yen. Japanese Finance Minister Shunichi Suzuki reiterated that if there are speculative foreign exchange fluctuations, Japan will take bold actions.
Mitsubishi UFJ - Daisaku Uenoo, chief foreign exchange strategist at Morgan Stanley Securities, said: "From the current account deficit of the Bank of Japan, the possibility of the Ministry of Finance intervening last week is high."
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