Here is everything about the current situation of Japan’s authority. Currently, the Japanese authority is suffering from a lot of pressure. Japan is suffering under a lot of pressure as the Yen wakens amid the United States interest rate which has now hiked the expectations. Now people on social media, are asking the will Bank of Japan to intervene. People are now craving to know what is the exact situation of Japan right now. What is wrong with Japan and why Japan is under pressure? Now to know everything about the situation of Japan read this article without missing any line.
According to the source, the Japanese authorities are struggling with a lot of pressure to combat a sustained depreciation in the yen. It has to happen because the investors are eyeing the prospects of higher for longer US interest rates when the Bank of Japan remains wedded to the super low-interest rate policy. According to the yen, the yen strengthened against the dollar on 3rd October 2023, Tuesday. It has led the market to all the participants so that they can believe that Japanese policymakers had officially intervened so that it can support the currency. And others have said that the size of the move is not convincing at all.
If we look at the last confirmed Yen-buying intervention Japan bought the yen in September 2022. It has forayed into the market so that it could boost its currency from 1998 when the Bank of Japan (BOJ) decided to maintain the ultra-loose monetary policy which has driven the yen and it has gone low of 145 per dollar. And now in October 2023, it has intervened when the yen dropped to a 32-year low of 151.94. It happens first when the Japanese authorities escalate their verbal warning to say that stand ready so that can act decisively. This warning was against the moves which shows the sign intervention that may be imminent.
Some people on social media were asking why should they step in so it is because buying Yen intervention is very rare. The Ministry of Finance has now sold the yen so that it can prevent the rise from hurting the export-reliant economy as it makes Japanese goods very less competitive. But the biggest problem is that the yen has gone weak. Japanese firms have shifted their productions in the entire overseas and now the economy is heavily reliant on the imports of goods which range from fuel and some raw materials for machinery parts.