Japan has announced it is prepared to counter all forms of speculation in the financial markets after the yen surged during the Golden Week holiday, leading to market expectations that authorities may intervene multiple times.
On May 7, 2569 at 08.16:XNUMX a.m., Bloomberg News reported that The Japanese government has signaled its readiness to retaliate against speculative movements in the financial markets. This followed market speculation that authorities might intervene in the yen exchange rate again during the recent long holiday.
Atsushi Mimura, Japan's Deputy Minister of Finance for International Affairs. He told reporters on Thursday that... The government is closely monitoring the market with urgency amid ongoing speculative movements, and reiterated that Japan is prepared to take countermeasures in all aspects when asked about the possibility that yen volatility may be linked to the crude oil market.
However, Mimura declined to comment directly on the yen's appreciation on Wednesday, when it surged about 1.8% in approximately 30 minutes to reach 155.04 yen per dollar, its strongest level in 10 weeks, before trading around 156.35 yen per dollar on Thursday morning.
Mimura did not answer the question of whether the Japanese Ministry of Finance has a level of currency it wants to protect. Japanese authorities typically indicate that they will intervene in cases of extreme volatility or excessive movement, rather than specifically targeting a particular currency.
Since reports of Japan intervening in the market on April 30, the yen has appreciated rapidly on several occasions during the Golden Week holiday, which ended on Wednesday, leading to market speculation that Japanese authorities may intervene multiple times to support the currency.
However, frequent interventions raise questions about the extent to which Japan can implement such measures while maintaining its status as a freely floating exchange rate country under the International Monetary Fund (IMF) guidelines.
IMF guidelines specify that If Japan wants to maintain this status quo, it may only have room for three more consecutive currency interventions before November.
However, Mimura insisted that the rule did not limit the number of times Japan could enter the market.
However, following the end of the long holiday, liquidity in the market is starting to return, which may make it more difficult for Japanese authorities to guide the market direction.
Mimura concluded by saying, "Even though the holidays are over, the weekend will return again," which was seen as an attempt to send a warning signal to investors and speculators in the currency market.
refer : www.bloomberg.com
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