The Japanese government spent a record-breaking $42.8 billion to prop up the yen in October amid a 32-year low compared to the dollar.
The 6.3499 trillion-yen influx is over twice the previous record, achieved just last month, at 2.8 trillion yen, or $19.7 billion, according to Reuters. However, analysts at Goldman Sachs said more unannounced interventions may have been carried out after Oct. 28, and the reported intervention figure only covered the window from Sept. 29 to Oct. 27, according to the Financial Times.
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“We would not rule out the possibility of additional unannounced interventions being made after October 28,” they said.
As of Monday, the yen is trading at 148.8 for every $1, according to Yahoo Finance. The slump outdoes the crisis of the late 1990s, the worst point at which the yen was trading — at 144.75 for every $1.
More interventions are likely to take place, as indicated by statements from top Japanese officials. Masato Kanda, the country’s top currency official, recently said the government has “limitless” amounts of currency reserves with which to conduct further interventions. It’s estimated that Japan has $1.3 trillion in foreign currency reserves.
The yen-buying spree that started last month was the first such action since 1998. The man largely credited with that previous intervention, Eisuke Sakakibara, dubbed “Mr. Yen,” speculated that the large-scale intervention will not prove to be that effective.
“I think authorities know that intervention itself is not that effective,” Sakakibara told CNBC last week.
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He estimated that the yen could fall to the range of 170 for every $1 by next year.
This year’s slump is the result of the increasing gulf between the loose monetary policy of the Bank of Japan and the tightening of most other major central banks, reports said.
