yen intervention

India's foreign exchange reserves dropped by $7.511 billion to $681.384 billion in the week ending May 22, marking a second consecutive weekly decline. This decrease follows a significant fall in the previous week, with the reserves now under pressure due to the Middle East conflict and RBI's currency market interventions.

The Indian rupee hit a historic low against the US dollar, pressured by corporate demand and soaring crude oil prices. Authorities are considering measures like incentivizing foreign currency deposits and easing tax rules for overseas investors to boost dollar inflows.

Asian markets navigated a cautious trading session Friday, influenced by ongoing Iran conflict uncertainties and stalled US-Iran talks. While some indices saw modest gains, others dipped, reflecting investor unease. Rising oil prices added to market anxiety, with analysts predicting continued volatility. Attention also turned to currency markets, particularly the Japanese yen, and upcoming central bank policy decisions.

India's foreign exchange reserves surged by $2.362 billion to $703.308 billion in the week ending April 17, following a previous gain of $3.825 billion. This increase, driven by rising foreign currency assets and gold reserves, marks a rebound after a decline caused by Middle East geopolitical tensions.

India's foreign exchange reserves surged by $3.825 billion to $700.946 billion in the week ending April 10, following a significant increase in the prior week. This rise was primarily driven by an increase in foreign currency assets and gold reserves, contributing to the overall growth.

The data comes alongside separate figures that confirmed Japan did not conduct stealth intervention in September and only entered the market to buy yen for U.S. dollars on Sept. 22 as announced, its first foray into the market to prop up the Japanese currency since 1998.

Japan intervened in the currency market on Thursday to shore up the battered yen for the first time since 1998, in the wake of the central bank's decision to maintain ultra-low interest rates that have been driving down the currency.

Japanese Finance Minister Shunichi Suzuki declined to comment on remarks by an IMF official about currency intervention. He stated that the recent declines in the yen are driven by fundamentals and do not warrant intervention. The IMF considers intervention justified only in certain conditions, which currently do not exist. Japan bought yen last year to boost the currency but authorities maintain that it is the speed of fluctuations, not the level, that matters for intervention.

Asian markets mostly dipped, led by Japan's Nikkei, as a stronger yen hit exporters like Toyota. Currency volatility and US trade policy uncertainty kept investors cautious ahead of the Federal Reserve's decision. Meanwhile, US futures saw a slight dip amid tariff concerns, and commodities like gold and silver surged as investors sought safe havens.

Germany's economy is projected to dislodge Japan's as the world's third largest in 2023, helped by a slide in the yen against the dollar and euro. The IMF's latest projections estimate Germany's nominal GDP at $4.4 trillion this year, compared with $4.2 trillion for Japan. That would leave Germany lagging only the United States and China in terms of economic size. The figures also point to steadier long-term growth in Germany that will concern policymakers in Japan as they mull the details of their latest economic package.

With the Yen for the first time in 16 years breaching the 80-mark against the US dollar, Indian companies that had used the Japanese currency to raise overseas debt may have some reason to worry as their repayment cost could go up.

Asian equities rose as oil prices paused their rally, despite escalating Middle East tensions. Investors await U.S. Federal Reserve signals on interest rates, with markets anticipating no rate cuts this year. The U.S. dollar weakened, while Treasuries found support after a strong bond auction.

The yen sank to a new 34-year low past 160 per dollar on Monday after a forecast-beating US inflation reading dented expectations for US interest rate cuts this year. "Markets appear to be trying to push dollar-yen towards 160 in the absence of official intervention," said Vishnu Varathan, at Mizuho Bank.

The Japanese government said on Friday that it will spend $10.9 billion on its fresh stimulus package to grapple with the recent upsurge of the yen and downside risks to Japan's economic growth by creating 2 lakh jobs and encouraging consumer and business spending.

Japan's Nikkei share average rebounded on Tuesday, briefly scaling 40,000 points as traders bought on the dip before easing back due to the risk of currency intervention by the central bank. The Nikkei was up 0.13% at 39,853.20 at the midday break, bouncing back after profit-booking pushed it to a two-week low on Monday.

The dollar rose to a six-month high on Wednesday, erasing earlier losses, after statistics from the United States revealed that the services sector unexpectedly picked up pace last month, thanks to an increase in new orders and businesses paying higher prices, implying ongoing inflation pressure. After the data, the dollar recovered against major currencies, with the euro and sterling hitting three-month lows and the yen at session lows. The US dollar, on the other hand, fell slightly in the afternoon as volume decreased.