The Yen continues to fluctuate around the 155 yen/USD mark in the context of the market closely monitoring exchange rate movements and moves from Japanese officials.
Since April 30, the Yen has repeatedly recovered against the USD but is still trading around the 155 zone. This development occurred when the market saw many speculations about Japan's ability to participate in supporting the foreign exchange market.
Global economic factors are still significantly impacting exchange rate developments, in which energy prices remain high despite Iranian tensions showing signs of cooling down. The market is also waiting for further signals from the Bank of Japan (BOJ) and the Fed regarding interest rate policy in the near future.
Oversea-Chinese Banking Corp. strategists, including Moh Siong Sim, said that the market is currently focusing on monitoring Japan's ability to continue to take measures to support the Yen if necessary.
Although officials have not confirmed intervention, people knowledgeable about the issue said that the Japanese government entered the market on April 30 when the USD/JPY exchange rate exceeded the 160 mark. According to analysis from the BOJ account, the scale of support at that time was about 34.5 billion USD.
Traders also believe that strong fluctuations appearing on May 1, May 4 and May 6 are characterized by the buying of the Yen from the central bank.
Previously in 2024, Japan had repeatedly supported the foreign exchange market when the USD/JPY exchange rate fluctuated around the 160 zone.
In the recent fluctuations, the USD/JPY exchange rate once reached 160.72 before falling to a 10-week low of 155.04 on Wednesday and then increasing again. By Thursday afternoon in Asia, the exchange rate fluctuated around 156.40.
According to experts from Goldman Sachs Group Inc., Japan still has financial room to continue supporting the market if necessary.
Mr. Atsushi Mimura - Japan's top monetary official said on Thursday that the country is ready to react to fluctuations in the foreign exchange market. He also emphasized that the International Monetary Fund (IMF)'s regulations do not limit the number of times the government is allowed to intervene in the monetary market.
