History of Japan's intervention in foreign exchange markets

History of Japan’s intervention in foreign exchange markets

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TOKYO (Reuters) – The Bank of Japan has conducted a rate check in apparent preparation for currency intervention, the Nikkei website reported on Wednesday, citing unnamed sources, as policymakers stepped up warnings of sharp falls in the and in.

It has been more than a decade since Japan intervened directly in the foreign exchange market and more than two decades since it intervened to support its currency, which it last did during the 1997-1998 Asian financial crisis.

Here is a timeline of selected moves in the forex markets by the Bank of Japan (BOJ).

Sep 7, 2022 – Top government spokesman Hirokazu Matsuno expresses concern over “swift and one-sided” moves seen in the forex market after the yen weakens beyond 143 per dollar. He says the government would like to take “necessary measures” if such movements continue. It is the strongest in a series of official comments made over several months.

June 10, 2022 – Japan’s government and central bank issue a rare joint statement saying they are concerned about the yen’s recent declines after it weakened beyond 134 per dollar.

August and October 2011: Japan steps in to curb gains that officials fear could derail recovery from an economic downturn triggered by a massive earthquake and tsunami on March 11, 2011.

March 18, 2011 – Group of Seven (G7) nations jointly step in to curb yen strength as currency hits post-earthquake all-time high on speculation Japanese companies would repatriate foreign assets to pay for reconstruction .

September 15, 2010: Japan intervenes in the foreign exchange market for the first time in six years, selling yen to stem the currency’s rise after the dollar hit a 15-year low of 82.87 yen.

March 2004: A 15-month campaign to curb the yen’s rise comes to an end after Japan has spent 35 trillion yen, or more than $300 billion, on intervention.

May-June 2002: The BOJ steps in to sell yen, often backed by the US Federal Reserve and the European Central Bank (ECB). The yen continues to gain.

September 2001 – The BOJ steps in to sell yen after the 9/11 attacks on the United States. The ECB and the New York Federal Reserve operate on behalf of the BOJ.

January 1999 to April 2000 – The BOJ sells yen at least 18 times, once through the Federal Reserve and once through the ECB, due to concerns that the currency’s strength will stifle economic recovery. The yen continues to strengthen.

1997 – 1998 – The Asian financial crisis causes the yen to weaken, reaching almost 148 per dollar in August 1998, even after US authorities joined the BOJ in buying yen.

April 1994 – August 1995 – The dollar sinks to an all-time low against the Deutsche Mark and to a post-war low against the yen. The United States repeatedly intervenes, often with Japanese and European central banks, to prop up the dollar.

1993 – The BOJ sells yen for much of the year to curb its strength.

1991 – 1992 – The BOJ steps in to support the yen, selling US dollars.

1988 – On January 4, the dollar falls to 120.45 yen, at the time a post-World War II low, in Tokyo trading. The BOJ steps in to buy dollars and sell yen.

1987: In February, six of the G7 nations sign the Louvre Agreement, the goal of which is to stabilize currencies and stop the general decline of the dollar.

1985 – The Group of Five industrial nations, the predecessor of the G7, signs the Plaza Agreement, in which they agree that the dollar is overvalued and that they will act to weaken it.

1973 – The Japanese monetary authorities decide to let the yen float freely against the dollar.

(Compiled by Tom Westbrook and Daniel Leussink; Editing by Bradley Perrett)

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