Japan confirms $62 billion currency intervention to prop up weak yen
Office workers look at an electronic stock board display in Tokyo on March 9, 2020. The Japanese government said on Friday it intervened in purchasing the yen to strengthen it in May. File Photo by Keizo Mori/UPI
May 31 (UPI) — The Japanese Finance Ministry on Friday confirmed it spent trillions of yen over the past month to slow its dramatic fall against the U.S. dollar.
The finance ministry said it spent $62.25 billion from April 26 to May 29, marking a monthly record and its first currency intervention since Tokyo spent $59 billion to prop up the yen in 2022.
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Japanese officials had said they would take “appropriate” measures to fight volatility in foreign currency exchange but sought to stop the fall through stealth intervention, without publicly announcing its involvement.
The timing of the government actions appears to match a rise in the yen after it tumbled to a 34-year low against the U.S. dollar on April 29.
The Bank of Japan increased interest rates for the first time in 17 years in March but it appears it has not been enough to strength the yen, which has remained weak. Some worried that the soft yen would increase import costs while continuing to slam the Japanese economy.
In comparison with the euro, the yen remained weak in Europe as well, which will likely pressure the Bank of Japan to take another look at interest rates. The European Central Bank recently boosted its interest rates.
