Intellasia East Asia News – History of Japan’s Foreign Exchange Intervention

The Bank of Japan conducted a rate check in apparent preparation for monetary intervention, the Nikkei website reported on Wednesday, citing unidentified sources, as policymakers stepped up warnings of steep declines in the yen.

It has been more than a decade since Japan intervened directly in the foreign exchange market and more than two decades since it intervened to support its currency, which it last did during the Asian financial crisis of 1997 to 1998.

Here is a timeline of the movements selected in the foreign exchange markets by the Bank of Japan (BOJ).

September 7, 2022 Government spokesman Hirokazu Matsuno worries about “rapid and one-sided” moves in the currency market after the yen weakened past 143 to the dollar. He says the government would like to take the “necessary steps” if such moves continue. This is the strongest in a series of official comments of this type made over several months.

June 10, 2022 Japan’s government and central bank issue rare joint statement expressing concern over recent sharp declines in the yen after it weakened past 134 to the dollar.

August and October 2011 Japan steps in to curb gains that officials say could derail recovery from an economic crisis triggered by a massive earthquake and tsunami on March 11, 2011.

March 18, 2011 The Group of Seven (G7) countries jointly intervene to stem the strength of the yen when the currency hits a record high following the earthquake due to speculation that Japanese companies will repatriate foreign assets to pay the reconstruction.

September 15, 2010 Japan intervenes in the currency market for the first time in six years, selling the yen to stem a rise in the currency after the dollar hit a 15-year low of 82.87 yen.

March 2004 A 15-month campaign to rein in the rise of the yen ends after Japan spends 35 trillion yen, or more than $300 billion, in intervention.

May-June 2002 The BOJ intervenes to sell the yen, often supported by the American Federal Reserve and the European Central Bank (ECB). The yen continues to appreciate.

September 2001 The BOJ steps in to sell yen after the September 11 attacks in the United States. Both the ECB and the New York Federal Reserve operate on behalf of the BOJ.

From January 1999 to April 2000 The BOJ sells the yen at least 18 times, including once via the Federal Reserve and once via the ECB, as it fears that the strength of the currency will stifle an economic recovery. The yen continues to strengthen.

1997 1998 The Asian financial crisis sees the yen weaken, reaching nearly 148 to the dollar in August 1998, even after US authorities joined the BOJ in buying yen.

April 1994 August 1995 The dollar falls to a record low against the German mark and a post-war low against the yen. The United States intervened on several occasions, often with the Japanese and European central banks, to support the greenback.

1993 The BOJ sells the yen for much of the year to curb its strength.

1991 1992 The BOJ intervenes to support the yen by selling US dollars.

1988 On January 4, the dollar fell to 120.45 yen, at that time a post-World War II low, in Tokyo trading. The BOJ steps in to buy dollars and sell yen.

1987 In February, six of the G7 countries sign the Louvre Accord, which aims to stabilize currencies and halt the sharp decline of the dollar.

1985 The Group of Five industrial nations, predecessor of the G7, signs the Plaza Accord, in which they agree that the dollar is overvalued and that they will act to weaken it.

1973 The Japanese monetary authorities decide to let the yen float freely against the greenback.

Category: Japan

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