TOKYO: Japan confirms that it made record interventions in the foreign exchange market in October, selling the US dollar worth 6.35 trillion yen (US$48bil or RM204bil) to support its currency, Finance Ministry data shows.
The quarterly data showed a steep drop in the yen to a 32-year low of 151.94 (RM4.88) to the dollar on Oct 21 triggered the intervention that day, followed by another on Oct 24.
“The interventions were aimed at countering excessive currency moves driven by speculative trading, and they had certain effects,” Finance Minister Shunichi Suzuki told reporters.
“We’ll continue to monitor market moves carefully,” Suzuki.
The Finance Minister added that it was important for currencies to move steadily, reflecting economic fundamentals, and that future interventions were not entirely ruled out.
The stealth interventions, or making a foray into the market without announcing it, came after Tokyo intervened to buy the yen for dollars for the first time in 24 years on Sept 22.
Japan spent a record 5.62 trillion yen (US$42.5bil or RM180.9bil) on a single day of yen-buying intervention on Oct 21, and another 730 billion yen (RM23.5bil) on Oct 24, after spending 2.84 trillion yen (RM91.4bil) on Sept 22 to stem the yen’s sharp fall.
This came with its own impact, increasing the costs of living in resource-constrained Japan.
The dollar has pulled back to move in a range around 130 yen since then, while stoking some concerns about renewed yen rises that could hamper Japanese exports of cars and electronics.
It was rare for Japan to conduct yen-buying and dollar-selling interventions given the country’s past battle with a strong yen, which made Japanese goods less competitive overseas.
Japan publishes monthly intervention records at the end of each month.
The Finance Ministry also issues daily results for the prior quarter.
Separate Finance Ministry data yesterday showed that Japan’s foreign reserves rose for the third straight month to US$1.25 trillion (RM5.3 trillion) at the end of January.
This was boosted by interest payments on foreign bonds, waning interest rates, a softening of the dollar and gains in gold. — Reuters