The Bank of Japan on Thursday stuck to its dovish monetary policy as the government made a surprise move to intervene in the currency market amid rising inflation and the sharp fall in the yen’s value against the dollar.
Right after the BOJ’s announcement, the weakening of the yen accelerated to breach the key ¥145 line, prompting the Japanese government to give the green light to a yen purchasing intervention for the first time in 24 years. The intervention briefly bumped up the yen’s rate to the ¥140 level.
During a hastily arranged news conference Thursday evening, Finance Minister Shunichi Suzuki addressed the topic of why the government stepped in, saying, “In principle, exchange rates should be decided in the markets, but we cannot tolerate repeated rapid fluctuations by speculative moves.”