FT News Briefing Catch a falling yen
Sep 23, 2022
Several European nations are advocating for tougher sanctions against Russia amidst the Ukraine crisis. The UN suggests Pakistan should pause international debt repayments due to devastating floods. Meanwhile, the Bank of Japan is keeping interest rates in negative territory to stabilize the yen, adding complexity to the tug-of-war between the strong dollar and a weakening yen. The episode also briefly touches on a poet's success with an NFT sale, blending modern art and technology in a fascinating way.
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Japan's Monetary Policy
- Japan's central bank maintains ultra-low interest rates, diverging from global trends.
- This policy makes the yen vulnerable against a strengthening dollar.
Intervention to Strengthen Yen
- Japan intervened to prop up the yen by selling dollars and buying yen.
- This aims to curb the yen's rapid decline, although the impact might be temporary.
Historic Policy Shift
- Japan's intervention to strengthen the yen marks a major shift from its usual approach.
- For decades, Japan focused on preventing the yen from becoming too strong.