After the BOJ decided on 18 June to raise its policy rate, the yen briefly plunged into the ¥158 range, but its decline narrowed and it recovered to the upper ¥156 range. The market is increasingly considering the possibility that the BOJ conducted a “rate check,” in which it asks financial institutions for exchange-rate quotations.
In the New York foreign exchange market, the yen rose from the upper ¥157 range to the upper ¥156 range against the dollar. It had fallen sharply through the early morning local time, but its decline has since narrowed.
Although the BOJ decided on 18 June to raise its policy rate, expectations for further rate hikes receded because, among other factors, there was a dissenting vote. This accelerated yen selling and dollar buying, but the market is now considering the possibility that the BOJ made inquiries about current exchange-rate levels.
Market participants have pointed to the view that the BOJ conducted a rate check, asking financial institutions for quotations at current exchange-rate levels. Some also believe, however, that the impact would be limited without cooperation from the United States.
Attention is focused on how the market will respond to this development, as well as on related news reports.