Yen: Japan considers whether to intervene in its defense

The Japanese yen strengthened above $ 144, rising from its 24-year lows at the start of the session, following news that the Bank of Japan conducted a rate test in preparation for a possible currency intervention, while authorities rumors of intervention against a rapid decline in the yen have intensified.

Japanese diplomat Masoto Kanda recently commented that the government "will respond to the currency's moves without ruling out any options," as policymakers try to verbally defend the currency after heavy losses caused by US inflation data. Recall that in Japan the central bank and the government are independent, but in reality they coordinate their fiscal and konetary policies. Japan, to use a term loved by our elites, “It makes system”. Here is a chart with the prices of the yen

The yen has lost about 25% of its value against the dollar this year due to growing political divergence, as the Bank of Japan fulfilled its commitment to keep interest rates ultra-low to support an economy. fragile, while the Federal Reserve aggressively raised rates to fight inflation, followed by the Bank of England, the ECB and other Western central banks. A break of 145 yen per dollar would bring the Japanese currency to the levels reached last time before Japan and the United States decided to jointly intervene on the currency markets in 1998. Meanwhile, Japanese inflation remains low and moderate industrial growth continues.

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The article Yen: Japan evaluates whether to intervene in its defense comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/yen-il-giappone-valuta-se-intervenire-in-sua-difesa/ on Wed, 14 Sep 2022 09:00:12 +0000.