Japan intervened in forex market again during May holidays, source says
Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. REUTERS/Florence Lo/Illustration
TOKYO, May 8 : Japan intervened in the foreign exchange market during holidays in early May, in addition to yen-buying operations conducted on April 30, in repeated bouts of intervention in markets, a source familiar with the matter told Reuters on Friday.
The intervention since the start of May was timed to coincide with the holiday period, when market liquidity was thin, the source said, declining to be identified because the matter is private.
The source did not comment on the exact timing, frequency or scale of the intervention.
A calculation from the Bank of Japan's money market data indicated Japan may have spent as much as 5 trillion yen ($32 billion) in the period between May 1 and May 6.
Japan had already stepped into the market on April 30 to prop up the yen after it slid to a near two-year low against the dollar, sources previously told Reuters, with the move aimed at halting a decline exacerbated by a spike in energy prices linked to the Iran war.
BOJ data indicated the cost of that operation may have reached around $35 billion.
Traders suspected that three more jolts in the currency pair through Wednesday of this week marked further intervention. With Japan closed for a three-day holiday, the latest BOJ figures imply the operations may have occurred across several sessions.
Under International Monetary Fund criteria, intervention of up to three instances within six months is still classified as a "free-floating" regime, with operations conducted within three business days counted as a single instance.
Japan's top currency diplomat Atsushi Mimura said on Thursday the classification itself does not pose constraints on how often Tokyo can intervene in currency markets.
