The Bank of Japan could have directed about 3.5 trillion yen ($22.5 billion) to intervene in the foreign exchange market on May 1 in order to support the yen exchange rate, Bloomberg reports with reference to Central Bank data and analyst forecasts.
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On May 2, the Bank of Japan reported a reduction in the volume of assets on its balance sheet by 4.36 trillion yen. Brokers on average estimated the reduction at 833 billion yen.
As reported by Bloomberg, the intervention was most likely carried out shortly after the announcement of the results of the US Federal Reserve (FRS) meeting on the evening of May 1.
Read: Japanese Yen Falls to Lowest Since 1990
“With the holidays in Japan and the imminent release of US labor market data, it was a very opportune time to to attack speculators,” said Meiji Yasuda Research Institute economist Yuya Kikkawa. — This will greatly affect the market. I see the authorities’ firm intention to defend the line of 160 yen per dollar.”
The dollar exchange rate paired with the yen strengthened during trading on Thursday by 0.5% and amounted to 155.3 yen per $1. During trading the day before, the dollar fell to 153 yen.
The Bank of Japan does not comment on rumors of interventions. Official information on the Central Bank's operations on the foreign exchange market for the month will be published on May 31, and a breakdown by day can only be made public in August or later.
