ING International: Japan and South Korea may jointly intervene in the forex market

ING Strategists said that the joint statement by the finance ministers of Japan and South Korea on the depreciation of Asian coins, which was also joined by US Treasury Secretary Janet Yellen, increases the likelihood that the two neighbors will intervene jointly if the coins depreciate further. If USDJPY and USD-KRW hit 155 and 1400 respectively, Japan and South Korea could intervene at the same time. Volatility in one-month forex trading against the Japanese yen and the South Korean won "has been on the high side, approaching 10% and 9%, respectively." The Central Bank of Japan sold $70 billion in its last intervention from September to October 2022, and Central Bank data from the Bank of Korea showed between $2 billion and $6 billion per quarter last year. Any large-scale forex intervention could temporarily slow the dollar's upward pump, although a reversal would require a big change in the current situation.