History of Japan’s intervention in currency markets


A woman counts Japanese 10,000 yen notes in Tokyo, in this February 28, 2013 illustration. REUTERS/Shohei Miyano/Illustration/File Photo

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April 21 (Reuters) – A precipitous fall in the yen has investors worried that Japan may intervene in the open market to support the currency.

It has been more than a decade since Japan intervened directly in the foreign exchange market and more than two decades since it intervened to support its currency. Read more

Here is a timeline of the movements selected in the foreign exchange markets by the Bank of Japan.

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Yen interventions from the 1990s to the 2020s

1973 – Japanese monetary authorities decide to let the yen float freely against the greenback.

1985 – The Group of Five industrial nations, the predecessor of the G7, signs the Plaza Accord in which they agree that the dollar is overvalued and that they will act to weaken it.

1987 – In February, six of the G7 countries sign the Louvre Accord, which aims to stabilize currencies and halt the steep decline of the dollar.

1988 – On January 4, the dollar falls to a post-World War II low of 120.45 yen in Tokyo trading. The Bank of Japan intervenes to buy dollars and sell yen.

1991 – 1992 – The Bank of Japan steps in to support the yen by selling US dollars.

1993 – The Bank of Japan sells the yen for much of the year to curb its strength.

April 1994 – August 1995 – The dollar falls to a record low against the German mark and a post-war low against the yen. The United States intervened on several occasions, often with the Japanese and European central banks, to support the greenback.

1997 – 1998 – The Asian financial crisis sees the yen weaken to nearly 148 to the dollar in August, even after US officials joined the Bank of Japan in buying yen.

January 1999 to April 2000 – The Bank of Japan sells yen at least 18 times, including once through the Federal Reserve and once through the European Central Bank, due to fears that a strong yen could stifle an economic recovery. The yen continues to strengthen.

September 2001 – The Bank of Japan steps in to sell yen after the September 11 attacks in the United States. Both the ECB and the New York Federal Reserve operate on behalf of the BOJ.

May-June 2002 – The Bank of Japan intervenes to sell yen, often supported by the Federal Reserve and the ECB. The yen continues to appreciate.

March 2004 – The end of a 15-month campaign to rein in the rise of the yen in which Japan spent a total of 35 trillion yen, or more than $300 billion, in intervention.

September 15, 2010 – Japan intervenes in the currency market for the first time in six years, selling the yen to stem a rise in the currency after the dollar hit a 15-year low of 82.87 yen.

March 18, 2011 – G7 countries jointly intervene to stem the strength of the yen when the currency hits a record high following a massive earthquake, on speculation that Japanese companies would repatriate foreign assets to pay for reconstruction.

August and October – 2011 – Japan steps in to rein in gains that officials say threaten to derail recovery from the economic crisis triggered by the March earthquake and tsunami.

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Compiled by Tom Westbrook

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