Arab News Japan

TOKYO: The Japanese government and the Bank of Japan are considering intervening in the crude oil futures market, aiming to check the yen’s depreciation by tackling speculation.

Jiji Press reported that the speculation comes as yen selling pressure is increasing amid expectations that the country’s trade deficit will expand due to soaring crude oil prices because of the conflict in the Middle East.

The report quoted Finance Minister KATAYAMA Satsuki as saying: “It is widely said that speculative moves in the crude oil futures market are having an impact on the foreign exchange market. We will take all possible measures on all fronts.”

The yen has weakened in conjunction with soaring crude oil prices, with the dollar rising close to 160 yen. 

The government apparently believes that crude oil futures market intervention can indirectly affect the currency market. 

However, crude oil futures intervention “would undermine the market’s function, so it’s unrealistic,” an official of an asset management company said. 

Earlier this month, speculation emerged that the US government could intervene in the crude oil futures market to lower prices, but US Treasury Secretary Scott Bessent said the government would deal with rising prices by releasing stockpiled oil.

The Japanese government also plans to start releasing state oil reserves on Thursday to ensure stable supplies and lower prices.