(Bloomberg) — U.S. Treasury Secretary Janet Yellen acknowledged sharp moves in the yen’s value this week, even as she declined to say whether Japan has intervened to support the currency.
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“I will not comment on whether they intervened or not,” Yellen told reporters on Saturday after a speech in Mesa, Arizona. “I think that’s a rumor.”
However, she said the yen had “moved little in a relatively short period of time,” adding, “We expect these interventions to be rare and consultations to take place.”
It appears that the Japanese authorities entered the market to support the yen on two occasions during the past week. One came after the yen fell to above 160 yen against the dollar for the first time in 34 years, and another followed after Federal Reserve Chairman Jerome Powell said a rate hike was unlikely to be the US central bank’s next rate move.
Fed increases weaken the yen against the dollar, so Powell’s comments made it easier for yen purchases to move the currency in the other direction.
A Bloomberg analysis of the Bank of Japan’s current account data suggests that Japan may have spent nearly $60 billion on these measures. Towards the end of the week, Finance Minister Shunichi Suzuki refused to confirm Japan’s intervention.
Yellen’s statements on Japanese intervention have varied over the past two years. It regularly refers to a long-term agreement between the Group of Seven countries to let the market determine exchange rates. It also said that intervention could only be justified if it aimed to mitigate volatility, but not influence exchange rates. She repeated those points on Saturday.
But when Japan has previously intervened to boost the yen’s value, it has avoided criticizing the moves.
Yellen was in the battleground state of Arizona to talk about the Biden administration’s economic policies. She also spoke Friday in Sedona to say that moving away from democracy in the United States would undermine the country’s economic strength.
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