The yen briefly breached the 150-per-dollar level on Tuesday in the foreign exchange market, marking its first touch of that psychological line since October 2022. A Japanese official refrained from commenting on any potential intervention, with Deputy Finance Minister Masato Kanda stating to reporters that no remarks would be made on the matter after the yen crossed the 150 threshold and then rebounded sharply, fueling talk of possible action.
During the opening hour on the Tokyo Stock Exchange, the yen traded between 148.95 and 149.23 per dollar. Authorities in Japan could have stepped in to purchase yen to curb its slide, though Kanda declined to discuss such possibilities. He did emphasize that the government remains 100 percent committed to responding to excessive movements in the exchange rate using any tools at its disposal.
Similarly, Japanese Finance Minister Shunichi Suzuki, in a separate remarks, said he would not comment on whether any intervention was underway but added that when exchange rates swing to extremes, appropriate measures will be taken without ruling out intervention. The overarching aim, in his view, is to restore stability in the foreign exchange market.
The renewed weakness of the yen followed a period of depreciation and has raised concerns across the country. It comes after better-than-expected job offer data from the United States boosted selling pressure on the yen. The move reflects a widening gap between the pace of U.S. rate increases and the Bank of Japan’s continued stimulus measures, which include ultra-low interest rates.
Back in September 2022, Japan carried out its first monetary intervention since 2011, with a move to support the yen by purchasing the currency. That intervention highlighted the delicate balance for a country that imports heavily. A weaker yen can boost overseas earnings for Japanese companies, supporting repatriation and improving competitiveness, but it also raises the cost of imports and can strain national accounts in an economy that depends on external trade.
Nikkei down 2 percent at open
The principal index on the Tokyo Stock Exchange, the Nikkei, opened more than 2% lower as U.S. market weakness and expectations of larger monetary adjustments fed selling pressure at the start of trading.
As the session extended beyond the first hour and forty minutes, the Nikkei, which comprises the 225 leading stocks, fell by 656.33 points, or 2.1%, to 30,581.61. This marked a breach of the 31,000 level that had served as a psychological benchmark, with nearly four months passing since the previous breach on June 1.
Meanwhile, the broader Topix index, representing major constituents of the market, declined 46.17 points, or 2.03%, to 2,229.30, underscoring the widespread pressure across Japanese equities as traders weighed the implications of currency moves and potential policy responses.