On Thursday, Shinji Kanda, deputy minister of Japan's Ministry of Finance, said that Japan had taken bold actions to intervene in the foreign exchange market. The Japanese government is highly concerned about the excessive fluctuation of the yen and will maintain a high sense of urgency and closely monitor the trend of foreign exchange.
Affected by this news, the exchange rate of the Japanese yen jumped in the short term, and the dollar fell by nearly 350 points against the Japanese yen, which is now reported as 142.2.
This is the first rise in 24 years and 3 months since the Japanese dollar fell to 140 yen and 1998 during the Japanese financial crisis in June.
A government official told the media that the decision was made because the rapid depreciation of the yen could not be stopped.
The yen exchange rate fell to its lowest level since the Plaza Accord.
In the foreign exchange market, just before the government and the Bank of Japan intervened in the market, the exchange rate of the yen against the US dollar was in the high range of 145.
This is mainly because the Bank of Japan announced the latest interest rate resolution this morning, continued to loosen monetary policy on a large scale, kept the benchmark interest rate at a historical low of -0. 1%, and kept the yield target of 10-year government bonds near 0%, and said that it expected that the short-term and long-term policy interest rates would remain at the current or lower level.
After the announcement of the Bank of Japan's monetary policy, the action of selling yen to buy dollars in the market quickly warmed up, and the yen exchange rate fell to 145, the lowest level in about 24 years since 1998.
A market insider said, "The decision of the Bank of Japan to maintain large-scale monetary easing measures has made the market realize that the spread between Japan and the United States will further expand and the yen will immediately depreciate against the US dollar. The attention of the market is focused on what President Kuroda will say at the upcoming press conference. "
Compared with the range of 1 to 1 15 yen at the beginning of this year, the price has dropped by about 30 yen. The exchange rate of the Japanese yen against the US dollar has fallen by about 20%.
Looking back at 1985, the "plaza agreement" in which Japan, the United States and Europe coordinated their policies to revise the strong dollar, it was found that 20 13 was the year in which the exchange rate of the Japanese yen fell the most.
In that year, influenced by the large-scale monetary easing measures launched immediately after Kuroda took office, the yen depreciated rapidly, and the annual depreciation rate was about 17%.
Since the beginning of this year, the decline of the yen exchange rate has exceeded the record level of 20 13.
Some market participants believe that due to the differences in the direction of monetary policy between Japan and the United States, the spread will continue to expand and the historical weakness of the yen will temporarily continue.
The Minister of Finance of the Ministry of Finance "stands ready to take appropriate actions and stand by"
This afternoon, the finance minister of the Japanese Ministry of Finance, Kanda Kanda, responded in an interview with reporters about the depreciation of the yen, saying that excessive exchange rate fluctuations have a very negative impact on families and enterprises. In case of excessive fluctuation, appropriate measures should be taken and all possible means should not be ruled out. I was ready for this. I think that's it. It has been on standby for a long time.
In addition, when asked whether it really intervened in the foreign exchange market on the 22nd, Finance Minister Kanda said that Japan has taken bold actions and has intervened in the foreign exchange market.
Kuroda: "There will be no interest rate increase for the time being" and "The depreciation of the yen is one-sided"
Governor Haruhiko Kuroda of the Bank of Japan held a press conference at 3: 30 this afternoon to explain the reasons for maintaining monetary easing.
Haruhiko Kuroda, governor of the Bank of Japan, said at a news conference that foreign exchange intervention is under the jurisdiction of the Finance Minister, so I will not comment. He said: "Monetary policy does not target the exchange rate. We will pay close attention to the exchange rate and financial market related to the economy, especially the price trend. "
Regarding the view that "running counter to US monetary policy" leads to the weakness of the yen, Kuroda explained: "There are many factors behind exchange rate fluctuations. The spread between Japan and the United States has aroused great concern in the market and is said to be influential. The exchange rate has fallen sharply against the dollar, including countries that have raised interest rates sharply and have higher long-term interest rates than the United States. Therefore, we cannot explain and operate the current exchange rate trend just because of the interest rate difference between Japan and the United States. " He said.
Therefore, he believes that the current negative interest rate policy has not caused any major side effects or problems. Compared with other countries, there is no need to eliminate negative interest rates in the future.
When asked what he would do if the government asked the Bank of Japan to cooperate with the depreciation of the yen, he said, "I didn't expect this to happen. I don't think it will happen. "
In terms of monetary policy, Kuroda said that he would patiently continue to implement a strong monetary easing policy. Interest rates are expected to remain at current levels or lower. If necessary, we will further loosen monetary policy without hesitation until we achieve the goal of stabilizing inflation at 2%.
Kuroda said at a news conference, "At present, it is necessary to continue to implement the monetary easing policy in order to achieve the inflation target continuously and steadily by supporting the economy and raising wages. If necessary, we will take additional monetary easing measures. Since there is absolutely no change in continuing monetary easing, I don't think we will raise interest rates for the time being. "
Regarding the future price outlook, Kuroda said: "Due to the rising prices of energy, food and durable goods, the rising speed of consumer prices will accelerate by the end of this year, and then the rising speed will slow down." He said he expected the price to rise further before the end of the year.
Regarding the current economic situation, Kuroda said: "Despite the impact of rising resource prices, the economy is picking up as we continue to curb the spread of novel coronavirus and promote economic activities."