Report: Bank Of Japan Had Record Dollar Intervention In April
Apr. 30, 1987
TOKYO (AP) _ The Bank of Japan spent a 1.42 trillion yen in April, about $10 billion, to support the dollar and keep the yen from appreciating further, according to a central bank report released Thursday.
The latest monthly report on the supply and demand of funds showed some 1.42 trillion yen flowed out of the Bank of Japan's special foreign exchange account, indicating the extent of the central bank's intervention during the month when the yen surged, pushing the dollar to all-time lows.
In dollar terms, the total came to about $10 billion at an average April exchange rate 142 yen to the dollar, the largest intervention on record.
In yen terms the amount was the second largest of the post-war era, following the 1.64 trillion yen the Bank of Japan spent in August 1971 during the so-called Nixon Shock. That event stemmed from the impact of a dollar- defense program by former President Richard Nixon that included suspension of dollar-gold convertibility.
The Bank of Japan and other central banks actively intervened to support the dollar in April under agreements among major industrial countries to stabilize exchange rates roughly at then-current levels.
The Bank of Japan wanted to contain the yen's further upturn because the currency's strength already has hurt the economy seriously by slowing exports and forcing manufacturers to slash production and investment in the face of poor overseas sales and earnings.