As the greenback rose, the Japanese yen hit 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 has conducted its first foreign exchange intervention in 24 years. , after the Bank of Japan held its benchmark bank rate on hold for some time. Following the intervention, the yen edged higher in Thursday’s trading session as the US dollar moved lower against the Japanese yen. However, the greenback has gone back to the plate and the yen’s recent gains have begun to swing.
The yen’s struggle has put the Bank of Japan on the buying side of Forex markets for the first time in more than 2 decades
The US dollar is a prominent force in the fiat currency world and just recently the Japanese yen hit a 24-year low, prompting the Bank of Japan to intervene. Reuters reported on Thursday that Japan’s central bank had stepped into the forex market for the first time since 1998 to revive the slumping currency. In the year In 2011, the Bank of Japan sold the yen using physical intervention methods, the first buying intervention since 1998.
Following the intervention, the Japanese yen rallied but in 2010 JPY/USD exchange rate It still shows that the yen has weakened significantly against the greenback over the past six months. Speaking with marketwatch.com author Steve Goldstein, Michael Hewson, chief market analyst at CMC Markets UK, questions 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 looks like the Bank of Japan is currently looking to defend. Last week’s price check occurred at the same levels.”
China’s yuan, the European Union’s euro and several other fiat currencies took a hit from the stronger greenback – the yen’s intervention began to erode.
The yen is not the only fiat currency to struggle as the Chinese yuan continues to weaken against the greenback. After reaching parity with the US dollar this week, the EU euro is at $0.98 at press time.
Masato Kanda, Japan’s deputy finance minister for international affairs, said the yen’s latest 24-year decline was “a decisive step in the currency market.” At the time of writing, the US dollar index chart (DXY) rose to 111.448 and the yen’s gains were gradually being erased in the morning trading session (ET). In addition to a handful of fiat currencies, cryptocurrencies, precious metals and stocks are taking a heavy hit from the US dollar as of Thursday afternoon (ET).
What do you think about the Japanese yen sliding to a 24-year low and the Bank of Japan stepping in to correct the situation through the forex markets? Let us know what you think about this in the comments section below.
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