Monetary Policy] Yen Buying Intervention on March 21 Estimated to be 5.5 Trillion Yen, the Largest Ever
“Nihon Keizai Shimbun.
The Bank of Japan (BOJ) and the Japanese government may have intervened to buy the yen and sell the dollar on March 21 to the tune of 5.5 trillion yen, according to market participants’ estimates on March 24. The estimate was based on the Bank of Japan’s forecast of current account balances on the 25th, which was released on the 24th. The official figure will be announced by the Ministry of Finance at a later date, but it is significantly larger than the 2.8 trillion yen that the Bank of Japan intervened in on September 22, and may have been the largest yen-buying intervention in its history.
When the government and the BOJ intervene in foreign exchange markets by buying yen and selling dollars, the yen moves from current accounts held at the BOJ by private financial institutions to the treasury, causing current accounts to decline. Settlement will take place two business days later, so the results of the intervention on October 21 will be reflected in current account balances on October 25.
In the forecast for the current account balance on October 25 announced by the BOJ on October 24, the amount of decrease in the current account due to “fiscal and other factors” reflecting the foreign exchange intervention was 1.18 trillion yen. The BOJ had expected an increase of about 4.3 trillion yen at the beginning of the month. The difference between the two, approximately 5.48 trillion yen, is estimated to be the amount of yen buying intervention. Short-term investment firms also expected an increase of 4.2 to 4.3 trillion yen.”
That’s all they’ve been trying to do?
“It’s just a drop in the bucket, isn’t it?
(Japanese proverb: A remedy that works well to fix a situation before it worsens, but has no effect after it has worsened.)
“If you mean the impact on the exchange rate, you’re right.
If it’s not combined with monetary policy, it’s only going to burn some ‘investors’.”
But that doesn’t mean a rate hike, because it ain’t gonna happen.
“Well, it’s a floating exchange rate system. The people who are gabbling about exchange rate fluctuations are the ones who are stupid to begin with.
If you’re talking about high prices, just distribute the money you make from the foreign exchange gains to the people in the form of uniform benefits, sales tax cuts, etc.”
“The important thing is what you use the foreign exchange gains for. It would be a disaster if they used it for international redemptions.
Now it should be used for uniform benefits, social insurance premium exemptions, and consumption tax cuts.”
Just a gain on the intervention money at 75 yen.
5.5 trillion yen of wasted money invested.
But the price of the yen went back up in an instant.
“Keep up the good work and sell US Treasuries too.
You’ll make a lot of money with a weak yen.”
It was amazing to watch, wasn’t it?
Didn’t they teach you that you can’t just throw them in one at a time?
“Sell the dollars you bought at 75 yen for 150 yen.
…effectively doubling the amount of ammo left over from last time.
Individuals and HFs are all burned out.”
“So much so that individuals are dead?
I think it’s too subtle to say whether the funds were damaged.”
“Even with the strong argument that the weak yen is positive for the Japanese economy.”
The Japanese government and the BOJ just showed the world that they don’t like a weak yen.”
“It’s said that the yen may or may not move one pips in the hundreds of millions of dollars, so the government
The government would have to use the national budget to make a move like that.”
“It’s not intervention, it’s just profit taking.
It would be more profitable to sell US Treasuries while they are still available.
Unless you think the yen will stay weak forever.
After a year, you can make a lot of money by taking profits and buying back the yen when it appreciates.
You can make a lot of money if you buy them back with a strong yen.
How much US Treasuries do you have?”
“Japan’s foreign exchange reserves are too large, so it’s a good time to take profits and reduce them.
Holding on to the dollar is a bad idea because the dollar reserve currency regime is collapsing due to protests in the Middle East.”
“I mean, it was like they just took it back to half its original price.
I wonder if that had any effect.
Well, it’s always better to sell the dollar when it’s high.
It’s not necessarily high right now, though. It depends on the yen.
“The dollar is going to weaken.
Now is the best time to sell.”
“We’ve had a string of 24 days, but we’re no further back than we were the first time we intervened.
Maybe it’s working.”
“The Treasury knows that intervention has no effect.
The yen should depreciate as long as the fluctuations are not too drastic to begin with.
The goal from the beginning was to make money by reducing dollar holdings.
In any case, it’s a good time to sell dollars.
“The U.S. side says they haven’t heard of this intervention.
It’s not even a coordinated intervention.
We’re already lost, aren’t we?
“I don’t know what they want with 5.5 trillion yen all at once.
I’m sure the agencies must have been very happy.”
“5.5 trillion yen on the 21st, and another 2 trillion yen yesterday morning.
The funds are smiling because they’re happy because they’re getting a little extra spending money.
Of course, at the same time, they are also taking measures to sell dollars, so it’s probably only a real fee.
“The BOJ’s checking account has already declined by over 50 trillion yen since spring.
Quantitative and qualitative easing isn’t working anymore.
“Since we have 180 trillion in resources, doesn’t that mean we can waste up to 60 trillion?
The conditions may change early next spring and the yen may appreciate, so it’s in your best interest to sell dollars when you can.”
“Selling U.S. dollars is the same as the BOJ buying JGBs.
It’s like being a drug addict and not being able to stop.
Someday we’ll be in Argentina, and the US dollar will be fighting for it.”
After all, no matter how much the government intervenes, individuals will still go out and buy dollars.
“It is said that foreign exchange reserves should be equal to short-term foreign debt.
This is because in most cases, currency crises are caused by short-term external debt outflows that drive a country short on foreign reserves.
Japan has about $1.2 trillion in foreign reserves and more than $3.1 trillion in short-term foreign debt.
foreign currency reserves are only less than half, if not nearly one-third, of the originally appropriate level.”
“If you’re making money, lower your taxes.
If you’re making money, lower your taxes.
“They’re not making that much money because they’re deliberately buying the yen at higher prices to drive it higher.
Buying local currency in defense of your currency is basically a matter of treading on thin ice while counting the limited ammunition you have.
It’s basically treading on thin ice, just like China did a few years ago.”
“Profits from the sale of foreign currency reserves and interest rates are pooled for a few years and then transferred to the general account.
The proceeds from the sale of reserves will be pooled for a few years and then transferred to the general account, so there will be a little more money in the coffers after a few years.”
“I think we’re a long way from $150, in case you’re wondering.
If we’re not out of bullets, the so-called speculative yen sell-off will be quiet.
I hope the U.S. economy gets worse before we run out of bullets.”
“It’s so-called fiscal finance.
The more they do it, the more the yen loses value.
It’s no longer a legal tender.”
“This will be back soon, so the market is treating the BOJ as speculators.
And if they’re selling US Treasuries to sell more dollars, it’s a real mess, with a push to raise dollar interest rates.
“They’re stalling in the hope that the next FOMC meeting will halt the rise in US interest rates.
If they don’t stop falling, we’re in serious trouble.
If they can’t take decisive action, like raising interest rates, the country will evaporate.”
As long as the Ukraine conflict isn’t resolved, the yen will just sell off against resource-rich currencies.
“The democrats were investing in the US.
The democrats were investing in the U.S. and the LDP is cashing in.
But they’re not going to give it back to the people.”
“You don’t want to raise interest rates, but you don’t want the yen to depreciate, and that’s just arrogance.
Raise interest rates honestly. Also, the 20 trillion yen annual trade deficit hanging over the country is also a problem, and nuclear power plants need to be restarted quickly.”
“Intervening in a strong yen means absorbing yen from the market.
It’s the same as doing monetary tightening that reduces the amount of yen.
It is an anomaly that the Ministry of Finance is ordering monetary tightening in response to the BOJ’s quantitative easing.”
“If you want to reduce the volume of yen (monetary tightening), you need to do more than just withdrawing foreign exchange reserves.
Why not reduce the volume of yen by tightening taxation on speculative foreign exchange transactions?
I mean, essentially, taxation is a price adjustment measure, and in that sense, it’s no different from monetary policy.”
“The minister said we have plenty of resources, so we can intervene as many times as we want, and he was desperately trying to keep us in check.
But even if we raise the funds by selling dollar-denominated currency, the limit is 30 trillion yen.
We can only intervene undercover three more times.”