United States – Forex traders prepare for the probable interference to support the yen after touching a low price of 150 per US dollar or USD. On the other note, the Forex reserves of Pakistan drop to a low level as well.
Japanese yen closed below 148.70 on Friday, October 14, in its ninth week of consecutive losses. Shunichi Suzuki, the finance minister, stated that Japan is concerned regarding the immediate boost in the volatility in the trading market. Masato Kanda, a chief currency official, stated that the authorities were ready to take action.
These strong words were the recent warnings about the risky movement, which followed the yen slump to a three-decade low level. The authorities attempted to discourage Forex traders from testing the interference strategy. A quick slide in this country’s currency to 145.90 per USD last month started the first intervention to support it in 24 years.
According to strategists, the officials of Japan will not have a line in the sand, wherein they will act once again, aiming at the drop’s speed. However, some said that 150 is the main psychological level for the citizens of Japan, and a break might build pressure on the administration to act again.
According to Roberto Mialich from UniCredit, Forex markets might increase the bar to 150, which some investors suspect is the max decrease of yen that the authorities might accept now.
On another note, the Forex reserves of Pakistan fell to the lowest level, and now, this country is not receiving help from friendly countries or multilateral lenders.
As per the SBP or State Bank of Pakistan figure, the reserve decreased by o$302.9 million to hit the target of $7.596 billion on September 30. The net reserves that commercial, financial institutions had dropped by $39 million, which brought the net from $5.68 billion to $5.64 billion.
SBP stated that the drop was credited to external debt settlement, including commercial interest payments and loans on Eurobonds. Earlier, Pakistan demanded a bailout to avoid a total funding collapse and restore its Forex reserves. Despite the return of money, this country experienced devastating floods, which swamped around a third of it. It made the funding situation worse. Also, many Forex reserves in Asian countries drop to a multi-year low after the increase in the assets’ value due to the boost in the dollar value.
Now, the administration put restrictions, and they are postponing import payments to safeguard the declining reserves that hinder the country’s economic activity. PBS, or the Pakistan Bureau of Statistics, mentioned that the country’s trade deficit dropped by 21.42% yearly.