Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s monetary authorities made a last-minute decision to postpone to Wednesday an emergency meeting on a weak yen that was originally scheduled for Thursday to maximize the effect of stemming the yen’s sharp fall, a source familiar with the matter said. reported Reuters.
The meeting, which includes leaders from the Ministry of Finance (MoF), the Bank of Japan and the Financial Services Agency, is typically held during times of market turbulence, partly as a sign of concern among authorities about unwanted currency swings.
With the meeting seen as a sign that Tokyo is moving closer to intervention in the currency market, traders were looking for any signs it could be held again as the yen fell to a three-decade low against the dollar.
The Ministry of Finance remained silent on the timing of the meeting because its timing was opportune. The announcement came less than an hour before Wednesday night’s meeting began.
The meeting, originally scheduled for Thursday, was moved to Wednesday to maximize the psychological impact on markets, said the source, who asked to remain anonymous due to the sensitivity of the matter.
“It worked,” the source said of the decision to reschedule the meeting. “If we had waited until Thursday, it could have caused the yen to fall.”
The timing proved crucial as the yen accelerated its decline to hit a 34-year low of 151.97 per dollar late Wednesday. That was below the 151.94 level at which Japan last stepped into the market to support the currency in October 2022 and where markets were awaiting some sign of action from authorities.
Shortly after news of the meeting, the yen rose to around 151.00 and has been in a tight range since then. On Friday, the dollar was at 151.30 yen.
“The tripartite talks came at an opportune time because otherwise the yen could have fallen sharply,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
The Ministry of Finance was unable to immediately comment on the situation.
The source denied a Reuters report published hours before the meeting, citing a senior Japanese official as saying there was no need for a trilateral meeting. He said the meeting was an important platform to demonstrate the authorities’ resolve to deal with excessive currency movements.
The tripartite meeting was first held in 2016, initially to signal officials’ alarm over the excessive appreciation of the yen, which was hurting Japan’s export-dependent economy.
But the yen’s downward trend since 2022 has become a headache for Tokyo authorities, driving up the cost of importing raw materials and fuel.
Shortly after the tripartite meeting in September 2022, Japan intervened to buy the yen for the first time in 24 years. Japan has stayed out of the foreign exchange market since its last intervention in October 2022.