While the greenback edged higher, the Japanese yen touched a 24-year low and Japan decided to intervene in the foreign exchange (forex) market for the first time since 1998. Reports say the Bank of China. Japan’s central bank conducted its first foreign exchange intervention in 24 years. , after the central bank of Japan kept the exchange rate unchanged, the bank is preparing to hold back for quite a long time. Following the intervention, the yen rallied as the US dollar fell sharply against the Japanese yen in Thursday’s trading sessions. However, the greenback has rallied again and the yen’s recent gains are starting to waver.
The yen’s struggle leads the Bank of Japan to enter the buying side of the foreign exchange market for the first time in more than two decades.
The US Dollar has been a prominent force in the world of fiat currencies and more recently the Japanese yen hit a 24 year low This prompted the Bank of Japan to intervene. Reuters detailed on Thursday that it was the first time Japan’s central bank had entered the foreign exchange market since 1998 to prop up the falling currency. This is the first buy-side intervention since 1998 when the Bank of Japan sold the yen using physical intervention methods in 2011.
After the intervention, the Japanese yen appreciated but Exchange rate JPY / USD still shows that the yen has fallen a lot against the greenback over the past six months. Speaking to marketwatch.com author Steve Goldstein, Michael Hewson, chief market analyst at CMC Markets UK, is questioning the yen’s long-term decline.
“The big question is whether it will make a difference and change the long-term downtrend of the Japanese yen,” Hewson said. detail on Thursday. “The 145/146 level seems to be the level the Bank of Japan seems to want to protect at the moment as last week’s exchange rate test happened around similar levels.”
Chinese Yuan, EU Euro and More Fiat Currencies Beat the Greenback Strongly – Yen Intervention Begins to Rise
The yen isn’t the only fiat currency struggling like the Chinese yuan continue depreciated against the greenback. After reaching parity with the US dollar again this week, the European Union euro is now at $0.98 against the US Dollar at the time of writing.
Masato Kanda, Japan’s deputy finance minister in charge of international affairs, explained that the yen’s recent 24-year slump prompted officials to “take decisive action in the foreign exchange market”. At the time of writing, US Dollar Index (DXY) chart spiked to 111,448 and the yen’s gains in the morning trades (ET) are slowly being erased. In addition to a large number of fiat currencies, crypto assets, precious metaland stocks are also being beaten by the US dollar on Thursday afternoon (ET).
What do you think about the Japanese yen sliding to a 24-year low and the Bank of Japan stepping in to rectify the situation through the foreign exchange market? Let us know what you think about this topic in the comments section below.
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