The Bank of Japan conducted a rate check to inquire about exchange-rate levels in the market ahead of the Golden Week holidays. With the yen continuing to weaken, the move is being viewed as aimed at curbing exchange-rate volatility during the holiday period.
The Japanese government and the Bank of Japan carried out a rate check with market participants ahead of the Golden Week holidays, inquiring about exchange-rate levels. The move is reported to have been aimed at gauging the market's reaction as the yen continued to weaken despite the Bank of Japan having decided to raise interest rates.
Market participants are wary of the possibility of increased exchange-rate volatility during the holidays and are keeping in mind the possibility that measures could be taken at times other than the year-end and New Year period.
A hedge fund in London described the Bank of Japan's rate check as "a response that caught the market off guard and was quite effective," and is watching the impact of the intervention.