Isolated, Japan intervenes to support the yen

Haruhiko Kuroda, Governor of the Bank of Japan, in Tokyo, Thursday September 22. KYODO/via REUTERS

Japan's economy ministry intervened in the currency markets for the first time since 1998, when the country was the last country in the world to maintain negative rates.

Japan is the last country in the world to maintain negative rates and to pursue an accommodating policy of asset purchases. Thursday, the governor of its central bank, Haruhiko Kurodaeven specified that he saw no reason to change this policy "in the next two to three years", despite underlying inflation (excluding volatile elements) of 2.8% in August, admittedly unrelated to the levels observed in the United States or Europe, but higher than the objective.

A “decisive” intervention

This policy caused the yen to plunge to its lowest level against to the dollar for 24 years. The strength of the rise in US interest rates is attracting investors like a siphon.

To counter this trend, the Japanese Ministry of Economy intervened in the foreign exchange markets for the first time since 1998 by selling dollars, without specifying the extent of the operation. This sent the national currency back up to 140.3 yen to the dollar, after hitting a low of 145.89 earlier -…

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