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Is the yen's violent shock of nearly 600 points the result of the government? The top foreign exchange officer responded this way...

2024-04-30

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On Monday (April 29) local time, Makoto Kanda, the financial officer of the Japanese Ministry of Finance, said that the current foreign exchange market dynamics are "speculative, rapid and abnormal" and these factors cannot be ignored.

Masato Kanda is Japan’s highest-ranking foreign exchange official. When the media asked "whether the Japanese authorities will take action to intervene in the currency market during the day to support the yen", the most curious question for the outside world, Kanda refused to comment.

During the Asian session on Monday, the USD/JPY (156.77, 0.5100, 0.33%) once rose nearly 200 points and broke through the 160 mark, reaching a maximum of 160.30. Then it turned around and fell below five consecutive integers of 159, 158, 157, 156 and 155. pass.

As of press time, the U.S. dollar was trading at 156.16 against the yen, down more than 1.5% on the day. This "violent" exchange rate trend has led some industry insiders to speculate whether the Japanese authorities have intervened in foreign exchange - the yen has fluctuated almost as much as when Japan intervened in 2022.

In the interview, Kanda described the yen's falling momentum late last week as "excessive volatility driven by speculative trading." Media analysts believe that this wording implies that even if the Japanese government intervenes in the currency market, it is reasonable.

"The market conditions we are seeing now...can be described as speculative, rapid and abnormal, and the damage caused by such speculative moves to the economy cannot be ignored. Therefore, we hope to continue to take appropriate actions as needed."

Some people in the industry still do not admit that the Japanese authorities intervened. Shoki Omori, chief strategist at Mizuho Securities, said Monday's sharp fluctuations in the yen against the U.S. dollar may be due to thin market liquidity in Japan during the public holiday, rather than actual intervention.

When asked when he would intervene in the currency market, Kanda responded that the authorities were ready to take action "24 hours a day, 365 days a year". Recently, Mr. Kanda has made many verbal interventions, saying that "speculation is obviously present in the current market and cannot be tolerated."

Earlier this month, the finance ministers of the United States, Japan and South Korea issued a joint statement saying that policymakers are paying attention to currency markets, while acknowledging concerns about the recent depreciation of the Korean won and Japanese yen and agreeing to work closely on foreign exchange market developments.

This joint statement increases the possibility of joint market intervention by the three countries.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Is the yen's violent shock of nearly 600 points the result of the government? The top foreign exchange officer responded this way...

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