The Japanese yen has not been this weak in 34 years. Now the authorities are considering a currency grab.
Less than 20 minutes ago
– We follow developments in the currency market with a sense of urgency, says Japan’s Deputy Finance Minister for International Affairs, Masato Kanda, in an interview with the Bloomberg news agency.
The Japanese yen, which is considered one of the world’s most stable currencies, has fallen sharply over the past three years.
On Friday, one dollar traded for more than 151 yen, the weakest rate it has been in 34 years. Since the summer of 2021 alone, the yen has weakened by more than 25 percent against the dollar.
Kanda, who has a position comparable to a state secretary in Norway, says they will now take “appropriate action”.
– We are not ruling out any alternatives, he says in the interview.
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What are we going to do with all the gold?
Blame it on speculation
Japan’s Finance Minister Shunichi Suzuki said on Friday that speculation is behind the yen’s recent decline, writes Reuters.
The most important thing the authorities are monitoring is not the specific level the yen is at, but the speed with which the fall occurs, according to Suzuki.
Earlier in March, the Japanese central bank chose to raise the key interest rate for the first time in 17 years. Japan has been among the countries with the most expansionary monetary policy, and they have long had negative interest rates. After the interest rate hike in March, the key interest rate is in an interval of 0 and 0.1 per cent.
– Given how the yen’s decline continues despite the interest rate differential being smaller, albeit modest, suggests that there are speculative movements in the market, Suzuki said in the National Assembly.
Rise before interest rate decision
Asian stock markets are mostly up on Friday morning, an uptick that follows Wall Street’s advance on Thursday evening.
“Domestic events are driving the rise in China, Japan and South Korea, with investor sentiment underpinned by yesterday’s rise in the US markets,” Seo Sang-Young, market strategist at Mirae Asset Securities, told Bloomberg.
On Friday afternoon, the stage is set for the February figures for PCE inflation, the US central bank’s preferred inflation target.
This is how it looks on some of the most important stock exchanges around 9 o’clock on Friday morning:
- The Hang Seng in Hong Kong is up 0.91 percent
- The Nikkei 225 index on the Tokyo stock exchange rises 0.50 percent
- Kospi in Seoul rises 0.03 percent
- The Shanghai Composite rises 1.01 percent
