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More from Japan’s Kanda: Japan is in daily talks on foreign exchange and other issues with the United States and others.
Kanda, Deputy Minister of Finance in charge of International Affairs of the Japanese Ministry of Finance. It is he who will order the BOJ to intervene when it deems it necessary. Often referred to as Japan’s “greatest currency diplomat.”
Earlier:
Not anymore :
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The G7 discussions on the Iranian language have been a bit complicated, but have not yet reached a conclusion on which sanctions to apply
- Japan is in daily talks on foreign exchange and other issues with us and other countries.
- Japan and South Korea face a similar situation: they pay for imports primarily in dollars and are therefore likely to be sensitive to currency volatility.
After crossing 152, 153 and 154, it seems that the officials are taking the defense of 155 a little more seriously:
If there is an actual US dollar selling intervention to support the yen, here is some information on how it will play out.
Why should you look at MoF instead of BOj:
- The Ministry of Finance (MOF) of Japan is responsible for formulating the country’s foreign exchange policy, while the Bank of Japan (BOJ) is responsible for executing these policies, particularly in terms of foreign exchange intervention. exchange.
- The MOF can decide to intervene in the foreign exchange market if it considers (in the current situation) that the yen is too weak. Once the MOF decides to intervene, it issues instructions to the BOJ. The BOJ then conducts operations in the foreign exchange market by purchasing (under current circumstances) yen. The special account of the Foreign Exchange Fund (FEFSA), which falls under the jurisdiction of the MOF, is used for interventions. You will notice that in the current situation, where the BOJ would buy yen, it would draw on US dollar reserves to finance the other side of the transaction, buying US dollars (or other currencies if necessary).
- The BOJ’s operations are generally conducted through commercial banks that trade in the foreign exchange market. These may be spot transactions or futures transactions that are expected to take place at a later date. It should be noted that while the Finance Ministry has the ultimate authority to decide when to intervene, it does so in close consultation with the BOJ. The BOJ provides expertise and advice on currency and financial market conditions, which may influence the MOF’s decision. This collaboration reflects the balance between the roles of the two entities: the MOF as the government’s main financial and economic advisor, and the BOJ as the country’s central bank that maintains the stability of the financial system.
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