By: Barbara Zigah
The Japanese Yen, which has been appreciating since last week’s catastrophic earthquake in Japan, slipped by better than 3% in Asian trading today. The Yen’s decline against major currencies comes after the Bank of Japan sought approval from the G7 to intercede in the currency’s appreciation. Not only did the Japanese central bank get approval, but in an unusual showing of solidarity, all of the G7 members agreed that they too would intercede when markets in their respective time zones opened for business.
As reported at 3:49 p.m. (JST) in Tokyo, the U.S. Dollar rose nearly 4% against the Japanese Yen, trading at 81.90 Yen on the EBS trading platform. The common currency Euro also gained nearly 4% against the Yen, trading at 115.10 Yen. Most traders expect to see intervention now and again during the trading day, as the Dollar retreats below 80 Yen.
Market players confirmed that the Japanese central bank bought the greenback throughout the trading day, estimated at close to $25 billion. The last time the Bank of Japan interceded in the Yen’s rise was in mid-September 2010, when the effort then had little effect. At that time, the Bank of Japan received a great deal of criticism for their action, condemned as currency manipulation by most other governments.