Japan Likely Intervened Again to Defend Yen, BOJ Data Suggest

On Thursday, Japan likely conducted yen-buying intervention based on data from the Bank of Japan and private money brokers. The BOJ projected that commercial banks’ deposits at the central bank would decrease by 3.17 trillion yen next Tuesday due to fiscal factors, a significant difference from the previous predictions by money-market brokers. The gap between the BOJ’s forecast and the estimates by money brokers hints at the size of possible currency intervention. Finance Minister Shunichi Suzuki did not confirm whether the government intervened. The Japanese currency surged against the dollar during Thursday’s trading session, prompting speculation about intervention. Expectations of monetary policy easing in the U.S. may have influenced the market. Weaker-than-expected U.S. inflation data raised the possibility of Federal Reserve rate cuts, causing the dollar to weaken against the yen and other currencies. The yen has been trading close to a 38-year low against the dollar, standing at around 159 yen on Friday evening in Tokyo.