The Yen's Invisible Crutch

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Koushik Korampalli

May 5, 2024

Written by Koushik Korampalli

Est read: 0 minutes

This week the BoJ is suspected of intervening to raise the Yen 2 times this past week.
- This has not been officially acknowledged.
- Traders estimate the combined value at ¥9tn.
The Yen has generally been weak.
- This was good for pulling Japan out of negative interest rates and deflation recently.
- However now the weak yen is causing difficulty for the country’s consumption and imports.
- On Monday, the Yen hit a new 34 year low of under ¥160 against the dollar, which some believe to be the ‘line in the sand’ for intervention.
- The yen is down over 11% this year.
On April 26^th, the BoJ held interest rates at 0.1%.
- Governer Ueda downplayed the weakness of the yen claiming its impact on the economy would be minimal.
- Ueda had previously stated he was not comfortable to raise rates until the economy stabilised.
Masato Kanda (Japan’s chief currency diplomat) claimed that the yen’s excessive decline was driven by speculators and not an accurate movement.