Japanese Authorities Unlikely to Intervene in Currency Market Unless Yen Hits 155 to Dollar

Tokyo – Former top currency diplomat Hiroshi Watanabe stated on Thursday that Japanese authorities are unlikely to intervene in the currency market unless the yen plunges below 155 to the dollar.

Concerns have been raised in the markets about the possibility of yen-buying intervention by Japanese authorities as the currency nears the 152 level, where intervention last occurred in 2022.

However, Watanabe noted that the chance of intervention is slim for now, as the yen’s declines have been within a broader range compared to 2022 when the currency was falling more sharply.

He mentioned in an interview with Reuters, “At current levels, I don’t think authorities will intervene. They probably won’t step in unless the yen makes a sudden plunge below 155 to the dollar.”

Watanabe also highlighted that the 155 line would be a psychologically important level, and a break above it could attract a lot of media attention, potentially leading to intervention, especially if the yen’s declines are significant.

The dollar was trading at 151.70 yen on Thursday, maintaining a tight range after spiking to a 34-year high of 151.975 yen last week.

Watanabe pointed out that with the Bank of Japan expected to refrain from aggressively raising rates, Japanese borrowing costs will remain low, keeping the yen under downward pressure.

He also mentioned that other factors, such as Japanese firms investing profits overseas instead of repatriating them, could prevent a sharp rebound in the yen.

Overall, Watanabe does not foresee Japanese authorities intervening in the currency market unless the yen falls below 155 to the dollar.


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