Authorities are considering another round of currency-market intervention to support the yen, as it has weakened to its lowest level against the U.S. dollar since December 1986. This move is prompted by concerns over the impact of the sharp selloff on the Japanese economy. The USD/JPY exchange rate dropped to Â¥160.66/$1.00 during the June 26 trading session, with the yen losing nearly 14 percent against the greenback year-to-date. This decline has led to a rise in import prices in Japan, putting pressure on consumers and businesses. Comments from Vice Finance Minister Masato Kanda suggest that Tokyo is closely monitoring the situation and is prepared to take action to stabilize the yen. The uncertainty lies in the level at which Japanese officials will intervene in the foreign exchange market, with speculation on what triggers such intervention. This potential move comes after Japan spent over $61 billion in foreign-exchange markets between April 29 and May 29 to counteract the yen’s depreciation.
This will also play a role in officials’ upcoming rate decision.
The next two-day BOJ policy meetings are scheduled for July 30-31.