A sudden slide in the yen against the dollar yesterday stirred suspicions Japanese authorities intervened for a second time this month to try to prevent the currency’s strength from worsening a faltering recovery.
Traders in Tokyo reckoned a sharp yen drop was likely due to intervention, though the fall happened at levels where authorities were not expected to act.
Some blamed corporate orders for triggering the move and others a rumor — later denied — that Bank of Japan Governor Masaaki Shirakawa planned to resign.
PHOTO: BLOOMBERG
“At first, people thought that was intervention, but it seems like the market was driven one-way by Shirakawa’s rumour and so on. It was a bit like an accident,” said Ayako Sera, market strategist at Sumitomo Trust Bank. “It’s like everyone is afraid of ghosts in the market.”
Japan spent an estimated ¥2 trillion (US$23 billion) on Wednesday last week to combat a rise in the currency to a 15-year high against the dollar.
Japanese Prime Minister Naoto Kan, just re-elected as leader of the ruling party, faces a divided parliament so is keen to curb the strength in the yen, which has hurt Japan’s stock market and sparked the ire of exporters.
But while Japan’s unilateral action last week occurred throughout the global trading day and succeeded in driving the dollar up about 3 percent against the yen, the dollar rise yesterday quickly faded and there was no sign of follow-through action.
Adding to the intervention doubts, authorities confirmed their yen selling on Sept. 15, but declined to comment yesterday.
The dollar surge happened at midday Tokyo time.
The currency rose to as high as ¥85.40 from about ¥84.55 yen in a matter of minutes, and several traders said it looked like the Bank of Japan, which acts on behalf of the Ministry of Finance, had been selling yen.
Last Wednesday’s intervention drove the dollar up to near ¥86 from a 15-year low of ¥82.87, but the yen has clawed back about half those losses.
Despite doubts about whether Tokyo intervened yesterday, analysts expect authorities to step into the market if the yen’s rise accelerates from current levels.
“They sent out a message that they are ready to intervene in the market again if the yen firms beyond what they believe is a proper level,” Seiji Adachi, senior economist with Deutsche Securities in Tokyo, said of Japanese authorities.
“In terms of the economy, it is still going to be tough unless they bring the yen down to 90 to 100 against the dollar. But they probably can’t do that. So they are going to just try to stop it going any higher,” Adachi said.
Showing the uncertainty over whether authorities had intervened, the dollar drifted back toward ¥84.70 as no government confirmation emerged.
Japanese Finance Minister Yoshihiko Noda, who has said Tokyo must gain global understanding about its intervention, and the Bank of Japan declined to comment.
‘UNPRECEDENTED’: Taiwan’s envoy said that official wording framing Taiwan-China issues as not about unification or independence counters the narrative Beijing wants Use of the phrase “democratic Taiwan” by Germany’s new coalition government in official document shows that Taiwan-China issues are not about “independence” against “unification,” but about democracy against authoritarianism, Representative to Germany Shieh Jhy-wey (謝志偉) said yesterday. Germany’s Social Democratic Party, Free Democratic Party and the Greens — known as the “traffic light coalition” for their colors — on Wednesday inked a coalition agreement following elections on Sept. 26. The agreement, a blueprint for their governance for the next four years, mentions “Taiwan,” which is unprecedented, showing that the new German government is paying close attention to cross-strait peace and supports Taiwan’s
BIDEN NOD: A China watcher said that the inclusion of Taiwan is notable, as it is the only democratic state on the list that Washington does not officially recognize Minister Without Portfolio Audrey Tang (唐鳳) and Representative to the US Hsiao Bi-khim (蕭美琴) are to attend the US-led Summit for Democracy on Dec. 9 and 10, the government said yesterday, after US President Joe Biden announced the list of guests for the virtual event. The US Department of State on Tuesday announced a list of 110 invited participants, including Taiwan, Australia, Canada, the Czech Republic, France, Germany, Japan and the UK. China and Russia were not invited, and Beijing expressed anger at the decision to invite Taiwan. The summit is to revolve around three key themes: Defending against authoritarianism, addressing and fighting
‘BADGE OF HONOR’: Lithuanian lawmaker Dovile Sakaliene, who is on China’s travel ban list, said delegation members joked that they would be joining her on it soon A delegation led by the chairman of the Lithuanian Parliamentary Group for Relations with Taiwan yesterday arrived in Taipei to participate in a conference on democracy later this week. The group, led by Matas Maldeikis, a Lithuanian lawmaker and an outspoken critic of China, touched down at Taiwan Taoyuan International Airport at 6:18am yesterday. Maldeikis said at the airport that he expected the trip to enhance understanding between Taiwan and Lithuania after cooperation between the two sides took a big step forward this past year. “This trip will be another step in understanding each other because we are dealing with the same challenges,”
GET A BOOST: After considering the potential for local outbreaks amid an increase in cases abroad, a committee recommended adolescents receive their second shots The level 2 COVID-19 alert is to be extended until Dec. 13, the Central Epidemic Command Center (CECC) announced yesterday, as it advised people in six high-risk groups to receive a COVID-19 vaccine booster shot. It also recommended that adolescents aged 12 to 17 who had a first dose of the Pfizer-BioNTech vaccine receive a second shot. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said that the nationwide level 2 alert would remain in place for two more weeks from today. Chen said that during New Year’s events eating and drinking might be allowed in designated areas, while
RSS