While the greenback rose, the Japanese yen hit a 24-year low and Japan decided to intervene in the foreign exchange (FX) market for the first time since 1998. According to reports, the BOJ intervened in the FX market for the first time in 24 years after Japan’s central bank had been holding down its benchmark interest rate for quite some time. Following the intervention, the yen rallied as the U.S. dollar took a dive against the Japanese yen during trading hours on Thursday. But the greenback has stepped in again, and the yen’s recent gains have begun to falter.
The yen’s strength has the Bank of Japan on the buying side of the forex market for the first time in more than two decades
The U.S. dollar is a fiat money prominent force in the world, and just recently the Japanese yen hit a 24-year low, prompting the Bank of Japan to intervene. Reuters detailed on Thursday that Japan’s central bank intervened in the foreign exchange market for the first time since 1998 to revive the falling currency. This is the first time since 1998 that the BOJ has intervened by buying, as it previously sold the yen using physical intervention methods in 2011.
After the intervention, the JPY rallied, but the JPY/USD exchange rate shows that the JPY has fallen significantly against the dollar over the past six months. of CMC Markets U.K. Chief Market Analyst Michael Hewson spoke with MarketWatch.com author Steve Goldstein, who 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 said Thursday indetail.” Given that last week’s rate hike was made at a similar level, the 145/146 level seems to be the level the BOJ wants to protect at the moment.”
Chinese yuan, EU euro, and many other fiat currencies take a hit from the greenback’s surge – gains from yen intervention begin to erode
In addition to the yen, the Chinese yuan is also suffering as it continues to fall against the dollar. The EU euro, which reached parity with the US dollar again this week, is at$0.98against the US dollar at the time of this writing.
Japan’s Vice Minister of Finance for International Affairs, Masato Kanda, explained that with the recent 24-year depreciation of the yen, the authorities have “taken decisive action in the foreign exchange market.” At the time of this writing,USD Index Chart (DXY)surged to 111.448 and the yen’s strength during the morning trading hours (ET) is gradually dissipating. In addition to the big hand of fiat money,crypto assets. 62} precious metals
and stocks are taking a beating from the US dollar as well on Thursday afternoon (ET).
What do you think about the Japanese Yen falling to a 24-year low and the BOJ starting to get things back on track through the forex market? Let us know what you think about this subject in the comments section below.
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