Japan will release its forex intervention data today, Friday, May 31, 2024.
The Bank of Japan (on behalf of the Ministry of Finance) intervened to buy yen on April 29 and May 2, but there has been no official confirmation from the Japanese authorities yet. However, today is the day. The Ministry of Finance publishes the figures for its currency interventions at the end of each month.
- Submit by 7pm local time (1000 GMT, 6am Eastern Time).
- Speculation about the amount of the intervention has centered around 9 trillion yen ($57.11 billion) between the two dates.
We see a steep decline after the intervention.
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If you’re interested in learning more about how intervention works and why you should look at the Ministry of Finance and not the Bank of Japan, see below.
- Japan’s Ministry of Finance (MOF) is responsible for formulating the country’s foreign exchange policy, and the Bank of Japan (BOJ) is responsible for implementing such policy, particularly with regard to foreign exchange intervention.
- The Ministry of Finance can decide to intervene in the FX market if it determines that the Yen is too weak (as it stands). Once the Ministry of Finance decides to intervene, it issues instructions to the Bank of Japan. The Bank of Japan operates in the FX market by buying Yen (as it stands). The Foreign Exchange Fund Special Account (GATA Special Account), which is under the jurisdiction of the Ministry of Finance, is used for intervention. Note that in the current situation, when the Bank of Japan buys Yen, it draws on its US Dollar reserves and buys US Dollars (or other currencies if necessary) to fund the other side of the transaction.
- The Bank of Japan’s operations are typically conducted through commercial banks that trade in the foreign exchange market. This may be spot transactions or future transactions to be made in the future. It is important to note that the Ministry of Finance has the final authority to decide when to intervene, but does so in close consultation with the Bank of Japan. The Bank of Japan provides expertise and advice on financial and market conditions, which may influence the Ministry of Finance’s decisions. This collaboration reflects the balance between the roles of the two organizations, with the Ministry of Finance as the government’s chief financial and economic advisor and the Bank of Japan as the country’s central bank that maintains the stability of the financial system.
