Japan has revealed it sold $48 billion worth of the US currency in a bid to support the under-pressure yen in October.
Ministry of Finance (MOF) data released on Tuesday showed it made record interventions in the foreign exchange market over three months ago, selling 6.35 trillion yen worth of dollars.
The quarterly data showed a steep drop in the yen to a 32-year low of 151.94 to the dollar on October 21 triggered the intervention that day, followed by another on October 24.
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“The interventions were aimed at countering excessive currency moves driven by speculative trading, and they had certain effects,” Finance Minister Shunichi Suzuki told reporters. “We’ll continue to monitor market moves carefully.”
Suzuki said it was important for currencies to move stably reflecting economic fundamentals, and that future interventions were not entirely ruled out.
The stealth interventions, or making a foray in the market without announcing it, came after Tokyo intervened to buy the yen for dollars for the first time in 24 years on September 22.
Japan spent a record 5.62 trillion yen ($42.5 billion) on a single day yen-buying intervention on October 21 and further 730 billion yen on October 24, having spent 2.84 trillion yen on September 22 to stem the yen’s sharp fall, which boosted living costs for resource-deficiant Japan.
Japan Yen Interventions Rare
The dollar has pulled back to move in a range around 130 yen since then, while stoking some concerns about renewed yen rises, which could hamper Japanese exports of cars and electronics.
It was rare for Japan to conduct yen-buying, dollar-selling interventions given the country’s past battle with a strong yen making Japanese goods less competitive overseas.
Japan publishes monthly intervention records at the end of each month, and it issues daily results for the prior quarter.
Separate MOF data on Tuesday showed Japan’s foreign reserves rose for the third straight month to $1.25 trillion at the end of January, boosted by interest payments on foreign bonds, waning interest rates, softening of dollar and gains in gold.
- Reuters with additional editing by Sean O’Meara
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