The yen hit a 34-year low against the US dollar yesterday, just over a week after the Bank of Japan (BOJ) announced a much-anticipated interest rate hike in a shift away from years of ultra-loose monetary policy.
The Japanese currency weakened to ¥151.97 per US dollar, its lowest level since 1990, before recovering to about ¥151.35 later in the day.
The drop came after a top BOJ official suggested it would continue to pursue an accommodative policy, echoing previous comments from the central bank, but soon afterward, Japanese Minister of Finance Shunichi Suzuki said authorities would not hesitate to “take resolute action against excessive” foreign exchange moves — raising speculation of a government intervention to prop up the currency.
Photo: AFP
The BOJ last week took a step away from its unorthodox monetary stimulus program by hiking rates for the first time since 2007, but the yen has continued to slide.
Yesterday’s dip came after BOJ board member Naoki Tamura reportedly told business leaders in northern Japan that “slow, but steady progress” was needed on scaling back the central bank’s long-standing ultra-easy policy.
He repeated a line from a bank policy statement about financial conditions staying accommodative for now, which triggered fresh falls in the yen, Bloomberg News reported.
After the currency hit a 34-year low, Suzuki said the government was watching the situation closely.
“We’re monitoring market movements with a high sense of urgency. We will take resolute action against excessive moves, without ruling out any options,” Suzuki told reporters.
The Japanese government last intervened in markets to support the yen in October 2022, and on Monday a finance ministry currency diplomat also hinted that it could be on the cards again.
Further fueling speculation, BOJ officials held a rare meeting with the finance ministry and the Financial Services Agency (FSA) yesterday evening about “recent developments in financial markets,” a central bank spokesman said.
“The recent weakening of the yen cannot be said to be in line with fundamentals, and it is clear that speculative moves are behind the yen’s fall,” Japanese Vice Minister of Finance for International Affairs and top currency official Masato Kanda told reporters after the meeting.
“We will take appropriate action against excessive moves without ruling out any options,” he said.
Attending the meeting were Kanda, FSA Commissioner Teruhisa Kurita and BOJ head of policy Seiichi Shimizu.
ING Groep NV said in a note that foreign exchange markets would “test the verbal intervention of the last few days to see if there is more substance than just words.”
Royal Bank of Canada head of Asia foreign exchange strategy Alvin Tan (譚文泰) said that “intervention concerns” had capped the yen’s slide, but risks of further depreciation remain thanks to factors including “the yen’s sizeable yield disadvantage.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”