Debates on Intervention in the Japanese Yen: What Will the Government Do?

Pressure on the Japanese Yen is Increasing

Recently, the Japanese yen has been in the spotlight with discussions of a new intervention, raising questions about what actions the government will take to support its currency. Additionally, the fluctuations in the foreign exchange market are attracting the attention of investors.

Prime Minister Takaichi's Statements

Japan's new Prime Minister Sanae Takaichi recently expressed the desire to slow down interest rate hikes after a meeting of the government’s economic and finance policy council. Takaichi emphasized that a suitable monetary policy is critical for a strong economy and stability.

Central Bank's Position

Although Kazuo Ueda, the Governor of the Bank of Japan, was present at the meeting, he did not make any statements. Takaichi's expansionary policies create pressure on the Japanese yen, while it was noted that direct intervention carries the risk of depleting foreign exchange reserves.

Market Analyses and Predictions

The CEO of financial analysis company SBI FXTrade Co., Marito Ueda, stated that the current situation is very different from last year's interventions. If Takaichi's policies proceed toward fiscal expansion, the yen may recover in the short term, but it is expected to sustain its weakness in the long term. In this quarter, the yen has depreciated by about 4.5% against the dollar and has become the currency that has lost the most value among the G-10 countries.

Government Monitoring Activities

Recently, Japan's Finance Minister Satsuki Katayama highlighted the excessive movements of the exchange rate, stating that the government is closely monitoring this situation with great urgency. In a speech at parliament, the minister said, "The government is monitoring excessive and irregular movements with great urgency."

Last year, when the USD/JPY exchange rate reached 160.17, the government intervened. Additionally, interventions were carried out at levels 157.99, 161.76, and 159.45.