TOKYO : Japan stayed away from intervening in the currency market in Nonvember for the first time in three months, the finance ministry said on Wednesday, as speculation grows for the U.S. Federal Reserve to slow the pace of rate hikes as inflation peaks.
The monthly data was closely watched for signs of a stealth intervention by Japan in November to stem the decline in the yen against the dollar, as authorities have been tight-lipped on currency action.
In September, Japan made its first foray into the market to prop up its currency since 1998. That was followed by record buying of 6.35 trillion yen in last month’s intervention as the Japanese currency hit a 32-year low, near 152 to the dollar.
Expectations for aggressive U.S. rate hikes, along with the Bank of Japan’s stance of sticking to monetary stimulus, helped drive the dollar to the 32-year peak against the yen last month.
However, weaker-than-expected inflation data this month has taken some heat off the prospects for aggressive rate hikes by the U.S. Federal Reserve, while the BOJ stays committed to ultra-low interest rates.
As a result, the dollar has weakened to about 138.7 yen against the dollar by Wednesday.
Japan’s past market forays had aimed to stem yen strength to benefit vital exports, but the currency’s drop of more than a fifth against the dollar this year spurred rare action by authorities to ensure the fall does not drive up living costs.
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