Bank of Japan Intervenes in Foreign Exchange Markets After Yen Slips to 24-Year Low
While the greenback has been rising higher, the Japanese yen tapped a 24-year low and Japan decided to intervene in foreign exchange markets (forex) for the first time since 1998. Reports say the Bank of Japan conducted the first forex intervention in 24 years, after the Japanese central bank kept its benchmark bank rate suppressed for quite some time. Following the intervention, the yen rallied as the U.S. dollar took a steep dive against the Japanese yen during Thursday’s trading sessions. However, the greenback has stepped back up to the plate and the yen’s recent gains are starting to waver. Yen’s Struggle Causes Bank of Japan to Step Into the Buy-Side of Forex Markets for the First Time in Over 2 Decades
The U.S. dollar has been a prominent force in the world of fiat currencies and just recently the Japanese yen tapped a 24-year low which pushed the Bank of Japan to intervene. Reuters detailed on Thursday that it was the first time the Japanese central bank stepped into forex markets since 1998 to revive the falling currency. It is the first buy-side intervention since 1998 as the Bank of Japan did sell yen using physical intervention methods in 2011. JPY/USD over the last six months. Following the Bank of Japan’s forex intervention, the yen has seen a slight spike against the greenback.
Following the intervention, the Japanese yen rallied but the JPY/USD exchange ratestill shows the yen is down a great deal against the greenback during the last six months. Speaking with marketwatch.com author Steve Goldstein, Michael Hewson, the chief markets analyst at CMC Markets U.K., is questioning the yen’s long-term decline.
“The big question is whether it will make a difference and change the long-term direction of the Japanese yen’s decline,” Hewson detailed on Thursday. “The 145/146 level does appear to be a level the Bank of Japan seems keen to defend at the moment given that last week’s rate check happened around similar levels.”
Chinese Yuan, EU’s Euro, and Many Other Fiat Currencies Take a Beating from the Robust Greenback — Yen’s Intervention Gains Start to Erode
The yen is not the only fiat currency struggling as the Chinese yuan has continued to depreciate against the greenback. After reaching parity with the U.S. dollar again this week, the European Union’s euro is now at $0.98 against the U.S. dollar at the time of writing. The U.S. Dollar Index (DXY) is a USD gauge against a basket of six major fiat currencies.
Masato Kanda, Japan’s vice finance minister for international affairs, explained that the yen’s recent 24-year drop made it so officials “have taken decisive action in the exchange market.” At the time of writing, the U.S. dollar index chart (DXY) has skyrocketed to 111.448 and the yen’s gains during the morning trading sessions (ET) are slowly being erased. In addition to a large handful of fiat currencies, crypto assets, precious metals, and equities are taking a beating from the U.S. dollar as well on Thursday afternoon (ET). Tags in this story 1998, 24-year low, Bank of Japan, benchmark interest rate, BOJ, Buy-Side, Buy-Side forex markets, Dollar, Dollars, falling currency, fiat currency, Foreign Exchange Markets, forex, Greenback, intervention, Japanese yen, low rates, Michael Hewson, Steve Goldstein, U.S. dollar, US dollars, USD
What do you think about the Japanese yen sliding to a 24-year low and the Bank of Japan stepping in to fix the situation via forex markets? Let us know what you think about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. ‘Investors Are Running out of Havens’ — Erratic Behavior in US Bond Markets Points to Deep Recession, Elevated Sovereign Risk ECONOMICS | 8 hours ago As Biden Drains the SPR Down to 1984 Levels, Chinese State Media Claims US Dollar "Is Once Again the World"s Problem" ECONOMICS | 1 day ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleFOREO’s Flagship Products Launch as NFTs Before Conventional Release, Paving the Way for Skincare Innovation Next articleFunko Partners With Walmart to Drop DC Digital Collectibles and Physical Twin Counterparts Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"
The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Bitcoin ATM Operator Indicted in New York Allegedly Running Illegal Business Attracting Criminals Australia to List Bitcoin ETF After 4 Clearinghouse Participants Commit to Meet Stringent Margin Terms Fed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike Ethereum Foundation"s Financial Report Discloses It Holds $1.6 Billion in Assets, 80.5% Held in Ether