Japan's record currency market intervention between April and May was aimed at curbing excessive yen movements driven by speculators and proved effective "to a certain extent," Finance Minister Shunichi Suzuki said Tuesday.
Until official data on currency intervention came out last week, Japanese authorities had not confirmed or denied market speculation that they had stepped into the foreign exchange market to slow the yen's fall against the U.S. dollar. Their silence had kept market traders jittery, though analysts say the yen's weakening trend has yet to be reversed.
"We took action to cope with excessive fluctuations, with speculative moves behind them. It was effective to some extent," Suzuki told a press conference.
"The government will continue to closely monitor developments in the currency market and intends to take all necessary steps," he said.
Japan spent 9.79 trillion yen between April 26 and last Wednesday, surpassing the previous round of yen-buying, dollar-selling operations in 2022, which totaled around 9.2 trillion yen. The ministry did not release daily breakdowns of the latest data.
The dollar climbed past 160 yen, a 34-year high, before Japan likely intervened to slow its further rise on April 29. Another suspected intervention came on May 1 in New York as the dollar tumbled in a short span of time.
The yen's weakness reflects the wide interest rate differential between Japan and the United States. The Bank of Japan raised interest rates in March for the first time in 17 years, lagging far behind the U.S. Federal Reserve that had already hiked rates aggressively to tame inflation.
Japan has stressed the need for currency movements to be stable and reflective of economic fundamentals. A weak yen cuts both ways for Japan as it boosts companies' overseas profits in yen terms but makes imports costlier for the resource-poor nation and accelerates inflation.
