Tokyo - Japan likely intervened during the Golden Week holidays and will step back into the market if the yen renews its slide below the psychologically key 160-per-dollar level, former central bank official Atsushi Takeuchi told Reuters.
While the Ministry of Finance has no intention of defending a specific line, Takeuchi said the 160 level has become a focal point for traders. Authorities acted to prevent a sharp selloff that could gain momentum once the currency breaks below that threshold.
Sources told Reuters authorities sold about $35 billion to support the yen last Thursday. During the holiday week, the yen saw three abrupt spikes, jumping as high as 155.00 before settling around 156.30 on Thursday.
"The price action certainly looks like intervention," said Takeuchi, now president at Ricoh Institute of Sustainability and Business. He added that authorities understand they cannot reverse the weak-yen trend but aim to slow falls until external factors shift.
Takeuchi dismissed the idea of Japan intervening in crude oil futures markets, calling it operationally risky and unlikely.