: Japanese yen bounces off lows after reports Bank of Japan conducts ‘check’ on rates

by | Sep 14, 2022 | Stock Market

The Japanese yen backed away from near 24-year lows on Wednesday, after reports that the Bank of Japan had conducted rate checks on the currency, which is considered the last step before intervention. The yen
was recently up around 1% against the dollar at ¥143.04 after a session low of ¥ 144.94, which put it precariously near the crucial ¥145 level. Citing sources, the Nikkei newspaper reported earlier on Wednesday that the central bank had carried out a foreign exchange “check,” asking traders about rates.

The ICE Dollar Index
was recently down 0.3% at 109.45, but is up 0.4% for the week. Investors are reeling from an unexpected jump in U.S. inflation on Tuesday that triggered the worst stock losses in two years and a surge into perceived safe-haven assets such as the dollar. Some are predicting the Federal Reserve could next week raise interest rates by as much as 1%. “The one thing about a central bank checking rates is it’s the second cheapest way of trying to slow the rise or fall in the value of a currency, without spending any money. The first is jawboning or talking the currency up or down. The Bank of Japan has now done both things.” Michael Hewson, chief market analyst at CMC Markets, told clients in a note. Down 24% against the dollar so far this year, yen weakness has triggered memories of 1998, when the Bank of Japan intervened during the Asian financial crisis as the currency surged to over ¥146. “The bigger question is whether the Ban …

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