Japan Is Warning Investors About Yen’s Sell-Off To Stop Currency From Sliding
The policymakers in Japan have been building pressure over the investors, telling them not to sell the yen in their possession.
Japan Wants to Stop Slide of Yen
The policymakers have been stressing the investors not to sell the yen in their possession.
However, the investors are panicking because the trading price of the US dollar has been rising significantly versus the yen.
In recent trading sessions, the trading price of the dollar rose to a 24-year high against the yen. Investors fear that the trading price of the yen may continue declining against the dollar.
Due to the fear, the investors want to sell the yen in order to make up for some of the losses. However, the policymakers in Japan are warning investors not to sell the yen in their possession.
The USD Roses to 146.35
In the latest trading session, the trading price of the dollar rose against the yen. It reportedly went up to 146.35 yen, which is the highest the greenback had hit since 1998.
It was during the Asian financial crisis when the value of the Japanese yen had fallen to such a lower level. This could mean that the Asian markets are currently facing an even worse financial crisis than in 1998.
As the price of the yen is constantly dropping against the dollar, the Japanese authorities could not sit still and had to intervene.
This is the second time in the past 60 days the Japanese authorities had to intervene and warn investors not to sell the yen. If the investors continue selling the yen, its value may plunge even more against the greenback.
If the price of the yen continues to weaken against the dollar, the financial crisis can turn into a major catastrophe for the Japanese market.
Intervention is Not Efficient
According to market experts, the currency intervention would not prove profitable for the Japanese yen. It could have a very bad influence over the value of the yen and can severely impact the value of the yen in the global forex market.
The investors see no possible improvement in the value of the yen despite the intervention. This is because the strength of the dollar has mustered up due to the constant increase in interest rates implemented by the US Feds.
There is also a divergence in the monetary policies of the United States and Japan that could cause a widening of the trading prices of both currencies.
At the time of writing, the trading price of the yen against the dollar is 146.20. For now, it is a difficult call for the investors to decide which side they would want to move to.