- We have a “free hand” in conducting interventions
- Our deputies in US, Japan are in close contact on forex matters
- All we can say is that past interventions have made an impact
The warning here isn’t anything new and it comes as we see USD/JPY inch closer towards the 160 mark once again this week. The currency pair has been threatening a push higher despite some dollar weakness in early April. That as the yen itself is struggling to get off the floor amid the damage done to the Japanese economy from surging energy prices.
As for her comment on past interventions having an impact, she’s not wrong. However, it must be pointed out that such a remark also doesn’t tell the full story.
As seen with previous intervention attempts, the impact they have on the yen currency is immediate but they tend to be temporary. In the last instance during July 2024, the intervention from Tokyo saw USD/JPY fall from 159 to 140 in about three months. However, we saw a near complete erasure of that drop by the time we got to early January 2025. So, keep that in mind.
And in this current backdrop, I can imagine any actual intervention having a more limited impact
