TOKYO — If you want to know how worried Asian officials are over a sliding US dollar this year, look no further than the frantic scene at Bank of Japan (BOJ) headquarters.
For at least five days now, BOJ Governor Haruhiko Kuroda’s team has been making massive unscheduled bond purchases. The reason: the yen’s surge in the two weeks since Kuroda announced a widening of the range in which the 10-year yield can trade to about 0.5% from 0.25%.
For the BOJ, it was the monetary equivalent of opening a can of worms. The December 20 shift aimed to reduce strains as US and Japanese rates pulled in diverging directions.
But Kuroda leaned into an already sliding dollar amid US recession fears. Now the BOJ is struggling to keep the yen from rallying too much, too fast and slamming Japan’s exporters.