(Bloomberg) -- Japan stepped into the foreign exchange market twice between April and June, according to a report on the government’s record intervention earlier this year.
The Ministry of Finance conducted currency interventions on April 29 and May 1, as detailed in the daily operational report released Wednesday for the quarter ended June. The equivalent of ¥5.9 trillion ($40.6 billion) and ¥3.9 trillion were spent on the respective days to prop up the yen, which had reached a multi-decade low at that time.
Wednesday’s report confirmed that no additional smoothing operations were conducted beyond these two dates. Earlier Bloomberg observations suggested the government sold Treasuries and other foreign securities to fund these interventions.
Despite the record spending, the impact of the two-punch interventions was largely seen as short-lived and didn’t reverse the dynamics in the market. Still, the government’s actions did help to discourage some speculators from betting heavily against the currency for a time, out of concern of further action.
Following the April-May interventions, Tokyo conducted follow-up operations to strengthen the yen last month, spending an amount equivalent to ¥5.5 trillion. The ministry is expected to release a breakdown covering the latest operations later this year, typically in November.
The Japanese authorities’ efforts to fight against a weakening currency are likely now nearing an end, with the yen gaining sharply amid a narrowing rate gap.
The Bank of Japan announced last week a rate hike to 0.25% from a range of 0% to 0.1%, along with a quantitative tightening measure of halving its bond purchases. Meanwhile, there’s been speculation the Federal Reserve’s next rate cut will be larger than previously expected following this week’s market turmoil.
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