The intervention pushed the Japanese currency down more than 7 yen to a low of 144.50 yen.
Tokyo:
A government official and another person familiar with the matter told Reuters that Japan intervened in the foreign exchange market on Friday to buy the yen for the second time in a month after the currency hit a 32-year low near $152.
Japan is attempting to shore up the battered currency as the central bank sticks with ultra-low interest rates, countering a global trend of tightening monetary policy and widening the gap between US and Japanese interest rates.
After the dollar rose to 151.94 yen, its highest level since 1990, the intervention pushed the Japanese currency down more than 7 yen to a low of 144.50 yen. The US currency was last down 1.8% at 147.34 yen.
A source said the Ministry of Finance (MoF) intervened in several phases from around 9:35 am (1235 GMT).
According to the GG news agency, shortly after the yen’s rally, Japan’s top currency diplomat, Masato Kanda, speaking to reporters, declined to comment on whether the MOF had intervened.
The MoF also bought the yen on September 22, as investors focused on the widening gap between the BoJ’s ultra-lax monetary policy and the US Federal Reserve’s aggressive rate hikes.
Finance ministers Shunichi Suzuki and Kanda have repeatedly indicated the government’s readiness to intervene, warning against excessive volatility. Suzuki said officials were prepared to take “stern” action against bookies before the intervention on Friday.
Many market players doubt whether a single intervention can reverse the Tokyo yen’s downtrend, even with Japan’s foreign reserves of $1.33 trillion. Tokyo money market brokerage firms estimated that Japan bought a record 3.6 trillion yen ($24 billion) in September’s action.
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