Daily Management Review

Japan Called Ahead A Last-Minute Yen Meeting To Maximise Market Impact: Reports


Japan Called Ahead A Last-Minute Yen Meeting To Maximise Market Impact: Reports
According to media sources, Japanese monetary officials decided at the last minute to move an emergency meeting on the weak yen slated for Thursday to Wednesday in order to maximise the impact of halting rapid currency depreciation.
The conference, which includes executives from the Ministry of Finance (MOF), the Bank of Japan, and the Financial Services Agency, is frequently held during times of market turmoil, in part to signal authorities' concern about undesired, sudden currency movements.
As the meeting is seen an indication Tokyo is taking a step closer to meddling in the currency market, traders were on the lookout for any signs it could be convened again as the yen fell towards three-decade lows versus the dollar. 
The MOF kept quiet about the meeting's timing as it figured out when it was best. The news was made less than an hour before the meeting began on Wednesday evening.
The meeting, which was originally scheduled for Thursday, was moved to Wednesday to maximise the psychological impact on markets, according to the source, who spoke on the condition of anonymity owing to the sensitivity of the situation.
"It worked," the source said on the decision to push forward the timing of the meeting. "If we waited until Thursday, it could have caused the yen to plunge."
The news of the meeting spurred a significant rally in the yen, which had touched a 34-year low of 151.97 earlier Wednesday. The dollar was trading at 151.30 yen on Friday.
The S&P is up more than 10% this year, while the blue-chip Dow is up about 6% and is now less than 1% away from breaking the 40,000 barrier for the first time. While the tech-heavy Nasdaq rose more than 9% from January to March.
There were no comments available from the MOF.
The source refuted an earlier Reuters report, published hours before the meeting, in which a top Japanese official stated that a three-party meeting was unnecessary. He said the meeting was a crucial opportunity for authorities to demonstrate their determination to curb excessive currency movements.
The three-party conference was initially conducted in 2016 to alert authorities to the yen's excessive gains, which were harming Japan's export-reliant economy.
However, the yen's decline since 2022 has caused a headache for Tokyo officials, raising the cost of importing raw materials and petroleum.
Japan intervened in the currency market for the first time in 24 years, just after a three-party summit in September 2022.
Japan has been out of the currency market since its last intervention in October 2022.