Tokyo – Japan could intervene in foreign exchange markets if the yen approaches 160 against the U.S. dollar, a former Bank of Japan (BOJ) official warned, signaling growing concern over the currency‘s recent sharp decline. The yen has weakened significantly this year, hitting a 34-year low, fueled by the widening interest rate differential between Japan and the united States.
The potential for intervention comes as a weaker yen increases import costs 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 expected to delay interest rate cuts, further exacerbating the yen’s depreciation. Any intervention would likely aim to stabilize the currency and prevent further economic strain,though the effectiveness of such measures remains a subject of debate among economists.
Naoki shirakawa, who served as BOJ governor from 2011 to 2013, stated in a speech on Thursday that intervention would be considered if the yen were to fall to around 160 per dollar. Shirakawa emphasized that intervention should be a temporary measure and coordinated with other countries to maximize 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, most recently in 2022 to counter a sharp yen decline.Finance Minister Shunichi Suzuki has repeatedly stated that Japan will take “appropriate measures” against excessive currency volatility, without explicitly mentioning intervention.
