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US Treasury Secretary Janet Yellen addresses sharp moves in the value of the yen

(Bloomberg) — US Treasury Secretary Janet Yellen acknowledged sharp moves in the value of the yen this week, even as she declined to say whether Japan had intervened to support the currency.

Yellen’s Response to the Yen’s Volatility

“I’m not going to comment on whether they did or didn’t intervene,” Yellen told reporters Saturday following a speech in Mesa, Arizona. “I think that that’s a rumor.”

Still, she said the yen “did move quite a bit in a relatively short period of time,” adding, “we would expect these interventions to be rare and consultation to take place.”

Japanese Intervention and Federal Reserve Chair’s Comments

Japanese authorities appeared to enter the market to support the yen on two occasions in the past week. One came after the yen weakened beyond 160 to the dollar for the first time in 34 years, followed by another after Federal Reserve Chair Jerome Powell said a hike was unlikely to be the US central bank’s next interest-rate move.

Fed hikes weaken the yen relative to the dollar, so Powell’s comments made it easier for yen purchases to move the currency in the other direction.

Analysis of Possible Intervention Costs

Bloomberg analysis of the Bank of Japan’s current account data suggests Japan may have spent almost $60 billion on the actions. Near the end of the week, Finance Minister Shunichi Suzuki declined to confirm that Japan had intervened.

Yellen’s Views on Intervention

Yellen’s statements on Japanese intervention over the past two years have varied. She regularly points to a long-standing agreement among Group of Seven countries to allow the market to determine exchange rates. She has also said intervention can be justified only if it’s aimed at smoothing out volatility, but not to influence exchange rates. She repeated those points Saturday.

When Japan has previously intervened to strengthen the yen, however, she has avoided criticizing the moves.

Yellen’s Discussions in Arizona

Yellen was in the battleground state of Arizona to speak about the Biden administration’s economic policies. She also spoke Friday in Sedona to say that a turn away from democracy in the US would undermine the country’s economic strength.

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AI legalese decoder can help in situations like these by analyzing complex legal and financial language to provide a clearer understanding of the implications of interventions and market movements. It can assist in parsing through official statements and data to identify key points and trends, making it easier to navigate discussions around currency valuation and government actions.

Additionally, AI legalese decoder can offer insights into the legal frameworks and agreements that govern international exchange rates, helping to interpret the nuances of statements made by officials like Yellen regarding intervention policies and market dynamics.

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