"Depreciation of the yen - allegations of intent denied"
This is from the The West Australian 80 years ago (July 14 1933):
A copy of a statement issued by the Yokohama Specie JBank, giving reasons for the depreciation of the yen and denied allegations that Japan has deliberately depreciated Her currency in order to assist her export trades, has been received from the Japanese Chamber of Commerce of Melbourne. The Yokohama Specie Bank, which is practically controlled by the Japanese Government, is closely in touch with the Japanese exchange position. Great Britain abandoned the gold standard in September, 1931, and in December of that year Japan was forced to take similar action, according to the bank. The immediate effect on the yen was slight, and the rate was maintained at around 2.0%, against England (par. 2/0 9-16) and 36 cents to 37 cents (par 49.85 cents). Beginning in February, 1932 when the Sino-Japanese conflict occurred in the area of Shanghai, in anticipation that the inflation of currency would be inevitable to meet the war expenditure, an enormous volume of speculation was waged against the yen from all- parts of the world particularly from Shanghai Speculators. Frequent reassuring statements issued by the Japanese Government and bankers failed to stem the declining tendency... ...Alarmed by this unprecedented decline, the Japenese Government proclaimed, on June 30. 1032, a Capital Flight Prevention Act, which, in effect, prohibited the flight of capital from Japan, as well as the exchange, speculation...The Act had a certain sobering effect on the market, and the yen was maintained steadily until the middleof August, when the intervention of the League of Nations on the Manchurian question gave it another setback... ...the rumour that the League of Nations was likely to declare an econpmic blockade of Japan, coupled with the substantial deficit of the Japanese Government (worsened the) situation, and the yen again began to fall rapidly under selling pressure from abroad and a. the end of Novemberioe' rate dropped below 1/3 against London aud20 cents against New York. The position was very critical, the state ment ^proceeds. The Yokohama Specie; Bank Came into the market and began to sell dollars and sterling... and succeeded in maintaining the rate on America between 20i cents to 21 cents for certain periods In spite of .the. efforts of the Government and-- the uankers, the rate on London fell to 1/2 at the beginning of January, 1933. During the three months following, the yen fluctuated between 1/2 3-16 to aroand 1/3 against .England. On April 26, the Japanese Government enacted an Exchange Controlling Act to replace the Capital Flight Prevention Act. This Act em powered the Government to check the de cline of yen currency by more rigidiy con trolling exchange speculation and also prohibitine export of goods without nego tiating bills through banks. At present, the bank is unable to state the full cfiect of tlie Act. but. as far as the exchange rate is concerned, it is gradually recover ing, maintaining an average rate of late of 1/3 and 261 cents.Japan's Import Requirements. ,.;flt is evident.' the bank adds, 'that the Japanese Government and the bauiitrs nave used every measure in their power to^ check .the depreciation of the yen, and the «llegiition that they deliberately loweredthe/yen' lias i not a vestige of tmtb. It' must fie remembered that Japan is in aposition to piirchase enormous quantities d£ raw1 materials from abroad for her m idustrieSi and the decline of the yen has lad a' very serious adverse effect upon such purchases.'