Japan injected approximately 730billion dollars, but the yen remains in the 161yen range
The Japanese government injected approximately 730billion dollars into the foreign exchange market, and the Bank of Japan raised its policy rate to 1%, but dollar-yen surged overnight to as high as 161.810yen, extending the yen's weakness. Exchange-rate volatility could affect Asian financial markets and export companies' earnings, so investors should exercise caution.
The Japanese government injected approximately 730billion dollars into the foreign exchange market, but the yen's weakness continues. This is an important variable for investors because it could mean greater exchange-rate volatility.
In the New York foreign exchange market overnight, dollar-yen rose to 161.810yen, reaching 2024years 7months after approximately 2years at its highest level. It is still trading in the 161yen range.
The Japanese government began large-scale intervention from the end of 4month to defend the yen's value. The amount injected was reported to be approximately 730billion dollars.
As part of monetary policy normalization, the Bank of Japan raised its policy rate to 1%. This level was announced to be the highest in 30years.
Nevertheless, the yen did not immediately turn stronger. The market observes that the strength of the dollar and global capital flows are having an impact.
South Korean stocks and companies may experience immediate effects on export price competitiveness and translated earnings depending on exchange-rate fluctuations. Investors need to check exchange-rate-related disclosures and quarterly exchange-rate sensitivity data.
Sources: 연합인포맥스
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