Foreign exchange market update: Bank of Japan intervention

Foreign exchange market update: Bank of Japan intervention
  • News
  • Currency exchange

After more than 10 years – Bank of Japan again active in the FX market

It was already becoming apparent and on September 22, 2022 the time had come. After a 10-year hiatus, the Bank of Japan (BOJ) returned to the foreign exchange market. Monetary authorities decided that the devaluation of the Japanese yen was one-sided and too rapid. USD/JPY saw its widest trading range of the year on that day. The exchange rate fell from USD/JPY 145.90 to 140.35 within a very short time.

Although the weak yen finally generated the inflation that had been targeted and hoped for for years (currently at around 2.9%), the situation in Japan is tense. The yen has lost more than 20 percent against the USD since the beginning of the year.

As it is often the case when a currency intervention occurs, the USD/JPY rate is already approaching the 145.90 intervention level and we will find out in the next few days whether the BOJ will continue to intervene or just try to slow the Yen’s decline. In the past, the central bank did not only appear once on the foreign exchange market, but intervened aggressively over several weeks.

It will be interesting to see whether the Japanese central bank will be a role model for other national banks.

Trading range at the day of the Bank of Japan intervention:
Foreign exchange market update USD/JPY
Source: Tradingview

For more information on the foreign exchange market, please feel free to contact our forex experts! You can also check our live currency market overview.


Disclaimer:
Please note that this elaboration was completed on 30/09/2022 14:55 CET.
This article is for informational purposes only and does not take into account the particular circumstances of the readers. It does not constitute financial advice. The content of this article is not intended as an offer or solicitation to buy or sell any fx or to take any other action and are not intended to form the basis or part of any contract. Clients should seek independent professional advice and draw their own conclusions with respect to the suitability of the transaction, including its economic merits and risks.The information contained in this article is public data and has been obtained from sources believed by amnis to be reliable and accurate. Amnis Treasury Services AG makes no warranty or representation as to its correctness, accuracy or completeness for a particular purpose. Neither Amnis Treasury Services AG nor any of its employees shall be liable for any damages whatsoever arising out of the use of this article, its contents or otherwise.

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Gerhard Scharinger
Gerhard Scharinger is the Head Markets of amnis. He is an expert in Foreign Exchange, Treasury Management, Economics and Hedging. Besides various published articles and foreign exchange news he is also an international speaker at different events. Follow him and amnis on LinkedIn, Twitter and Facebook to keep up with the latest industry news and insights.
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