The Japanese yen was at its lowest since 2008 against the dollar today, as Japan intervened in foreign-exchange markets to weaken the currency for the third time this year, Bloomberg BusinessWeek reports.
Ordered by Japan’s Finance Minister Jun Azumi, the yen, which rose to its strongest since post- WWII, fell against all of its most-traded counterparts and the U.S. dollar rose against all of its major peers, Bloomberg reports.
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"Foreign exchange rates should reflect the real economy and fluctuate within the range of common sense. Otherwise it will distort the real economy," Azumi said, CNN Money reports. "I decided it [the intervention] this morning as I cannot tolerate such appreciation."
The yen appreciated to 75.32 per dollar early Monday and Azumi’s intervention sent it down to 79 per dollar, CNN Money reports. The Japanese government is worried that a strengthened yen will hurt its economy, which relies heavily on exports. "The yen's appreciation might close down factories and I cannot tolerate it," Azumi said, CNN Money reports.
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Traders estimated the Bank of Japan could have purchased $65 billion to $75 billion against its currency, Reuters reports.
Japan has been intervening in the market alone, although hoping for a coordinated intervention with the U.S., Europe and other trading partners, the Wall Street Journal reports. But has given up on these hopes of a coordinated intervention, especially after the last solo effort in August, WSJ reports.
“They haven’t implemented a floor or set capital controls, unlike the Swiss, which is why this intervention may not be as effective,” said Kathleen Brooks, research director at Forex.com in London, WSJ reports. Brooks said Japan is too big to replicate Switzerland’s steps.
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