On Friday, October 21, the US dollar climbed to a daily high of 151.94, and then fell rapidly in the short term, reaching 146.25 at the lowest point, and the intraday decline once exceeded 2.5%. According to reports, after falling below 151.9, the Bank of Japan interfered in the yen exchange rate. But after the news came out, the US dollar rebounded against the Japanese yen, and the current price has rebounded to above 147.
Before the North American trading session on Friday, 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.
During the early trading session of North America, the yen rebounded rapidly in the short term, and the US dollar fell to 146 against the yen.
Just when the market speculated that the Bank of Japan had taken action, according to Japanese media confirmation, the Bank of Japan intervened in the foreign exchange market. Japanese media quoted people familiar with the matter as saying that after the yen fell below 151.90 yen, hitting another 32-year low, Japanese authorities intervened in the foreign exchange market to support the yen exchange rate.
Another Japanese media said that the country's highest official in charge of foreign exchange affairs and deputy minister of the Ministry of Finance, Masato Kanda, refused to answer questions from reporters about whether the authorities interfered in the foreign exchange market.
After the announcement of the news that the Bank of Japan intervened in the market, the US dollar began to rebound against the yen, currently at 147.78, with a decline narrowing to 1.54%.
Bank of Japan intervened
There is no doubt that when the yen fell below the 150 mark, the pressure from the Japanese authorities increased sharply. Japanese media said on Friday that it confirmed that the Bank of Japan has intervened, the second time it has intervened in the foreign exchange market since September 22.
Previously, the Japanese government continued to conduct "verbal intervention", Japanese Finance Minister Shunichi Suzuki said on Friday that the authorities are "strictly" responding to foreign exchange speculators.
Suzuki Shunichi was asked at a regular press conference whether the yen was attacked by speculators:
We are strictly cracking down on speculators. We cannot tolerate excessive behavior of speculators. We will respond appropriately while observing the trends of the foreign exchange market with a high sense of urgency. The continued selling of
yen has made the market highly vigilant about the possibility of Japanese government intervening in foreign exchange again, and investors are looking for all clues that the Bank of Japan may conduct secret intervention. However, investors believe that the impact of any such action is limited.
Japanese government officials have repeatedly reiterated their concerns about the rapid decline of the yen, but Bank of Japan Governor Kuroda Haruhiko in a speech in Tokyo on Friday that they will continue to implement loose monetary policies to support the economy and drive wage growth.
yen continued to weaken, Japan's overall consumer price index (CPI) in September increased by 3% year-on-year. If the impact of rising consumption taxes is deducted, the inflation rate is the highest since August 1991.
Kuroda Haruhiko said that she would pay attention to the impact of foreign exchange on the economy and prices, but it is expected that CPI will slow down after reaching its peak at the end of the year.
As the world launched a massive hike in rate hike in to stabilize prices, Japan still insisted on loose monetary policy, causing the yen exchange rate to fall against all major currencies this year. The outside world expects that the Bank of Japan will continue to maintain its existing ultra-loose monetary policy after the two-day meeting next Friday. However, it is worth noting that after the Bank of Japan meeting last month, on September 22, the Bank of Japan intervened in the yen, the first time since 1998.
Jeferies Global Foreign Exchange Director Brad Bechtel said:
market is expected to intervene at any time. But if this happens, many investors will continue to bearish on the yen and short on the yen.
In addition, the market has noticed that Japan has already adopted a precedent for "stealth intervention" (i.e., the government enters the market to intervene on a smaller scale. This operation is more difficult to detect than conventional intervention). Some market view believes that this type of secret intervention may become one of the options commonly used by the Japanese government recently.
Citi : Japan's inflation may rise further due to the weak yen and
What puts greater pressure on the Bank of Japan is that Japan's inflation may rise step by step.
Economists from Citigroup said Japan's major inflation indicators are expected to accelerate further to their highest levels in 40 years.
Citigroupeconomics Kiichiko Murashima and Katsuhiko Aiba wrote in a report Friday that consumer prices, excluding fresh food, could rise 3.5% in October, compared with 3% in September. Mitsui Sumitomo Bank Nikkei Securities predicts inflation growth in October to be 3.4%, while Nikkei Basic Research Institute predicts that it will reach about 3.5%.
While the sharp rise in Japan's inflation is partly attributed to the historic decline of the yen, the market generally expects the Bank of Japan to stick to its weak yen-backed easing stance.
Citi's forecast shows that prices in Japan are growing at least as fast as the rate after the 2014 sales tax hike caused the economy to contract. Bank of Japan Governor Haruhiko Kuroda said it was necessary to pay attention to the impact of cost-driven inflation on consumer spending, despite his pledge to continue to implement a loose policy - a position that has prompted the yen to depreciate to its lowest level since 1990.
Specifically, Citi predicts that the end of October's impact on mobile phone fee reductions last year will cause Japan's inflation to rise by 0.24 percentage points. A survey by Teikoku Databank shows that a large number of food prices will rise in October. One factor that could complicate Japan's October inflation is that Japan opens its borders to foreign tourists from this month. Barclays expects travel-related discounts to reduce Japan's major inflation indicators by as much as 0.4 percentage points, and predicts that Japan's inflation will remain around 3% in the fourth quarter.
This article comes from Wall Street News, welcome to download the APP to view more
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-