Tokyo – Japan could intervene in foreign โขexchange markets if the yen approaches 160 against the U.S. dollar, a former Bank of Japanโ (BOJ) official warned, signaling growing concernโ over the currency‘s recent sharp decline. The yenโค has weakenedโฃ significantly this year, hitting a 34-year โฃlow, fueled by the widening interest rate differential between Japan and the united States.
The potential โfor โintervention โฃcomes as a weaker yen increases import โคcosts for Japanese businesses and consumers, impacting the world’s third-largest economy. While the BOJ has maintained its ultra-loose monetary policy, the Federal Reserve is โคexpected to delay interest rate cuts, โfurther exacerbating the yen’s depreciation. Anyโฃ intervention would likely aim to stabilize โฃthe currency and prevent further โeconomic strain,though the effectiveness of such measures remains a subject of debate among economists.
Naokiโ shirakawa, who served as BOJ governor from 2011 to 2013, stated in a speech on Thursday that intervention would โbe considered if the yen were to fall to around 160 per dollar. Shirakawa emphasized that intervention should be a temporary measure and coordinated withโ other countries to โmaximize its impact.
The yen was trading at 155.73 per dollar as of 10:18 a.m.in Tokyo. Japanese authorities have previously intervened in the currency market, โmost recently in 2022 to counter a sharp yen decline.Finance Minister Shunichi Suzuki hasโข repeatedly stated that Japan will take “appropriate measures” against excessive currency volatility, without explicitly mentioning intervention.