Yellen's statement on Japanese yen intervention

U.S. Treasury Secretary Janet Yellen said any intervention by Japan to support the yen would be understandable if it were aimed at smoothing volatility rather than trying to affect the exchange rate. Asked on Tuesday whether the U.S. Treasury would be receptive if Japan intervened in the foreign exchange market by buying yen, U.S. Treasury Secretary Janet Yellen said, “That would depend a lot on the details. We would generally communicate with them about interventions like that.” Japanese officials have expressed concern about the yen’s depreciation in recent weeks, which risks hurting the Japanese public’s purchasing power. The yen is trading at a 10-month low against the dollar. Earlier this month, Japan issued its strongest warning in recent memory about sharp currency moves, fueling expectations that the government would intervene if the declines continued. The Japanese government intervened to support the yen for the first time since 1998 last year after the currency fell about 20 percent against the dollar and hedge funds continued to increase their short positions in the yen. The G-7 countries have an agreement in principle to let markets determine their exchange rates. The Bank of Japan (BOJ) is due to announce its interest rate decision on Friday. No change in monetary policy is expected. JPMorgan expects the BOJ to end negative interest rates and yield curve control by mid-2024.