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Japan spent a record $42.8 billion on currency intervention this month to prop up the yen, the finance ministry said, with investors keen for clues about how much more the authorities might step in to soften the yen’s sharp fall.
The 6.3499 trillion yen ($42.8 billion) was broadly in line with the estimates of Tokyo money market brokers who thought Japan had likely spent up to 6.4 trillion yen over two consecutive trading days of unannounced interventions.
A steep drop in the yen to a 32-year low of 151.94 to the dollar on Oct. 21 likely triggered the intervention, followed by another one on Oct. 24.
However, the amount was nearly double the 2.8 trillion yen Tokyo spent last month in its first yen-buying and dollar-selling intervention in more than two decades. The latest intervention records were registered from Sept. 29 to Oct. 27.
The interventions helped to trigger an immediate drop in the dollar of more than 7 yen on Oct. 21, and another dollar fall to the yen by around 5 yen on Oct. 24 albeit temporarily.
The Japanese currency has since come under renewed pressure.
“Big spending on intervention has proved effective to a degree,” said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities.
