Japan Likely Stepped into Forex Market to Prop Up Yen Again

Tokyo, May 7 (Jiji Press)–The Japanese government and the Bank of Japan likely intervened into the foreign exchange market again to buy yen for dollars earlier this month, during Japan’s Golden Week holiday period, it was learned Thursday. Market sources estimated the intervention size during the period between Friday and Wednesday at around 4 trillion to 5 trillion yen. On Wednesday, the final day of the holiday period, the yen suddenly surged from around 157.50 per dollar to near 155.00 in overseas trading. The Japanese currency also spiked on Friday and Monday. The estimate is based on BOJ data on projected changes in commercial financial institutions’ current account deposit balances at the central bank, released Thursday. According to the data, treasury and other funds, which reflect the movements of funds used in market intervention if such action is taken, are forecast to log a shortfall of 4.51 trillion yen. The market had expected the figure to be between zero and a surplus of 500 billion yen. The difference between the market expectations and the BOJ forecast is believed to be the intervention scale. Atsushi Mimura, Japan’s vice minister of finance for international affairs, said earlier Thursday that there is no need to comment on whether the authorities stepped into the market. Japanese authorities are also believed to have conducted a similar intervention totaling 5 trillion to 6 trillion yen April 30. END [Copyright The Jiji Press, Ltd.]