The yen-dollar exchange rate once exceeded 149 yen per dollar during the day on the 18th, approaching 150 yen, a “psychological resistance line.” Amid prevailing market predictions that the yen-dollar exchange rate is imminent to surpass 150 yen per dollar, attention is being paid to whether the Japanese government will intervene in the forex market again. There are also rumors of “masked intervention” that secretly purchases yen.
Nikkei reported that the yen-dollar exchange rate once surpassed 149 yen per dollar in the New York forex market on the morning of the 18th. The yen-dollar exchange rate soared to 149 yen per dollar for the first time in 32 years and two months since August 1990, the so-called “bubble economy,” breaking the record again following the 14th. The yen-dollar exchange rate has fallen to 148.70 yen since the opening of the Tokyo foreign exchange market at 9 a.m., but the prevailing analysis is that entering the 150 yen range is a “only a matter of time.”
The weakening of the yen is attributable to the U.S. 10-year government bond rate rising to 4% and the deepening interest rate gap between the U.S. and Japan. Kyoto News analyzed that U.S. President Joe Biden’s remarks last week that “the U.S. economy is very solid and we are not concerned about the dollar’s strength” also strengthened investors’ move to buy dollars.
As the yen-dollar exchange rate is likely to exceed 150 yen per dollar, attention is being paid to whether the Japanese authorities will further intervene in the forex market following the 22nd of last month. Japanese Finance Minister Suzuki Ichi also hinted on the 17th that he could intervene in the forex market again, saying, “If there is excessive change due to investment, there will be no change in the idea of taking decisive measures.” Some even say that the Japanese government and the Bank of Japan will secretly intervene in the forex market to buy yen.
However, the interest rate gap between the U.S. and Japan, which is considered the fundamental cause of the yen’s depreciation, is unlikely to narrow for a while. Bank of Japan Governor Haruhiko Kuroda recently attended the House of Representatives Budget Committee and said he would stick to large-scale monetary easing and ultra-low interest rate policies.