For the first time since June 1990, the Japanese yen fell below the 153-line against the US dollar on Wednesday, sparking speculation that the government will intervene. In the past, the 152-mark was seen as the critical threshold that could trigger further action to support the yen. The Japanese currency continues to drop at an alarming rate. That’s despite the Bank of Japan (BOJ) ending its negative interest rate policy last month. At one stage on Wednesday, it fell nearly 1% to ¥153.24 against the greenback.
The latest dollar surge came after the release of the March Consumer Price Index by the Bureau of Labor Statistics. It showed a 3.5% hike compared to a year earlier, marking the highest annual gain in the past six months. The reading, which was released in the morning, led to increased dollar-buying and yen-selling. “It’s clearly a US dollar move and Japanese officials can’t really argue its speculators attacking the yen,” said Peter Vassallo, a portfolio manager at BNP Paribas Asset Management.
Finance Ministry Not ‘Ruling Out Any Options’ as Yen Continues to Tumble Against the Dollar
“They have been making a lot of verbal noise around intervention, so there may be an element of saving face and wanting to intervene on that basis,” added Vassallo. The last time the government intervened was in October 2022 when the yen fell to ¥151.95 against the dollar. Last month, Finance Minister Shunuichi Suzuki warned of the possibility of “bold action,” when the yen dropped to ¥151.97 to the dollar. “Recent moves are rapid,” said Masato Kanda, the vice finance minister for international affairs, on Thursday morning. “We’d like to respond appropriately to excessive moves, without ruling out any options,” he added.
