yen approaches the 150 mark, Japanese Finance Minister Shunchi Suzuki once again made a statement, but Central Bank still ruled out the possibility of hike rate boosting the currency...
USD versus yen overnight hit 149.91, the lowest level since 1990. In the early trading session of the Asian trading session on Thursday, the US dollar hovered around 149.84, approaching the psychological threshold of 150. The market is highly vigilant about the possibility of Japan's intervention in the foreign exchange market again.
On October 20, Japanese Finance Minister Shun Suzuki once again stated that the government will take appropriate measures to deal with excessive fluctuations in the money market.
"The recent rapid decline of the yen in unilaterally is not advisable. We absolutely cannot tolerate excessive fluctuations driven by speculative trading."
"We will continue to take appropriate measures to deal with excessive fluctuations while paying close attention to the latest progress in the money market."
yen has depreciated sharply because of policy differences between the Federal Reserve's aggressive interest rate hike action and the Bank of Japan's commitment to maintain a loose monetary policy beyond .
In order to cope with foreign exchange market fluctuations, the Japanese authorities spent 2.8 trillion yen (US$19 billion) to intervene last month, buying yen and selling US dollars. This is the first time that the Japanese government has taken action in the market to support the yen since 1998.
Bank of Japan Governor Kuroda Haruhiko warned that a sharp fluctuation in the yen would damage the economy. However, on Wednesday, he still ruled out the possibility of raising ultra-low interest rates to ease the downward trend of the yen.
Moreover, the Bank of Japan is facing new challenges. Under the yield curve control (YCC) policy, the Bank of Japan must make a large purchase of bonds to limit the yield on the 10-year Treasury bond to around 0%. The yield on 20-year Japanese Treasury bonds rose to 1.140% on Thursday, the highest since September 2015.
The outside world is generally expected to continue to maintain its massive stimulus plan at its policy meeting ended on October 28.
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