1. Huge FX Gains Are Japan's Benefit From Intervention, Setser Says.
- Author
-
Johnson, Carter
- Subjects
FINANCIAL stress ,FOREIGN exchange reserves ,BANKING industry ,FOREIGN exchange intervention (Monetary policy) ,FOREIGN exchange market ,NATIONAL currencies ,RESERVES (Accounting) ,FOREIGN exchange - Abstract
According to Brad Setser, a senior fellow at the Council on Foreign Relations, the Japanese government stands to make significant profits if they intervened in currency markets by selling dollars and buying yen. This is because Japan holds a large amount of foreign currency-denominated assets that were purchased when the yen was stronger. Setser explains that the Japanese authorities followed a basic investment strategy of buying low and selling high. It is believed that Japan conducted its first currency intervention since 2022 to support the yen, and it is estimated that they spent around $35 billion on this intervention. [Extracted from the article]
- Published
- 2024