Tokyo: On Monday, June 24, the yen dropped toward 160 to the dollar, increasing market apprehension for further intervention. Tokyo’s top currency diplomat, Masato Kanda, stated that Japan is always prepared to take action against disproportionate market movements.
“We won’t comment on day-to-day currency moves, as such comments could have unforeseen effects on the market, but we are always to ready to take appropriate action when there are excessive moves,” Kanda stated to reporters.
Following the Bank of Japan’s decision to postpone reducing stimulus for bond purchases until its July meeting, the yen has been under pressure. Early on Monday, the dollar was trading at ¥159.87.
Although Kanda acknowledged that the market is cautious about intervention due to the yen’s decline to 160 to the dollar, he pointed out that the authorities do not have any predetermined thresholds for when to step in.
The market perceives the authorities’ line in the sand to be ¥160 to the dollar. Japan invested approximately ¥9.8 trillion, or US$61.64 billion, to rescue the yen from its 34-year low of 160.245 per US dollar, which it reached on April 29.
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