According to reports from Reuters and the Nihon Keizai Shimbun on June 23, the yen-dollar exchange rate reached as high as 161.93 yen per dollar in New York's foreign exchange market the previous day. This marks the highest level in nearly two years, bringing the yen close to its lowest value since 1986.
The Nikkei reported that the yen-dollar rate peaked at 161.93 yen around 10 a.m. Eastern Time on June 22, before dropping to approximately 161.08 yen about an hour later. This timeframe coincided with the online discussions between Japan's Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Vessen.
Some market analysts have speculated that there may have been intervention by Japanese authorities to buy yen or a rate check by U.S. currency officials. However, the Japanese government has not confirmed any discussions regarding intervention.
During a press conference on June 23, Finance Minister Kato stated that the meeting with Secretary Vessen was not urgent and included discussions on financial market trends, including the yen's depreciation, as well as issues related to Iran and advanced artificial intelligence cooperation.
Nonetheless, Kato reaffirmed that the government remains committed to taking decisive action if necessary regarding currency rates, indicating readiness to respond to rapid fluctuations.
Japan had already intervened in the market by injecting 11.7349 trillion yen to defend the yen from late April to May. Despite this historic intervention, the yen's value has fallen below that level again, leaving open the possibility for further intervention.
However, some analysts believe that merely intervening in the currency market may not be sufficient to reverse the yen's downward trend. The Bank of Japan raised its benchmark interest rate to around 1% on June 16 and indicated a commitment to maintaining this upward trend. Still, concerns remain that expectations for further interest rate hikes by the U.S. Federal Reserve could widen the interest rate gap between the U.S. and Japan.
The Nikkei noted that the exchange rate of 161.96 yen per dollar recorded in July 2024 is seen as a sort of 'line in the sand' for Japanese foreign exchange authorities. If the yen-dollar rate exceeds this level, it could lead to market instability not seen since December 1986.
* This article has been translated by AI.
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