TOKYO (TR) – Japan’s intervention in the FOREX market to stem the strengthening yen may end up costing almost 40 trillion yen ($512 billion), Bloomberg News said, citing estimates by JPMorgan Chase.
The head of Japan rates and foreign-exchange research at JPMorgan Chase, Tohru Sasaki, said despite Monday’s record intervention, the Japanese currency is projected to gain further to 72 yen to the dollar by September of next year, Bloomberg reported. “It’s difficult to change the trend of the currency market. Even if the action can stem the currency’s gains temporarily,” Sasaki said and cited by Bloomberg.
Japan’s finance ministry did not comment on the size of Monday’ intervention. Bloomberg reported earlier the BOJ may have spent a record 8 trillion yen and based that assessment on projections of deposits held by institutions at the central bank.
It’s the second time within three months and the third time this year the Japanese government has stepped in the currency market. On August 4th, Tokyo intervened with a then record 4.5 trillion yen ($59 billion) to curb the currency’s appreciation against the U.S. dollar.