"...On June 24, 1997, during the peak of the Asian financial crisis, Japanese Prime Minister Ryutaro Hashimoto told a luncheon meeting at Columbia University, "I hope the U.S. will engage in efforts and in cooperation maintain exchange stability so we will not succumb to the temptation to sell off treasury bills and switch our funds to gold." A year later the resolve of the U.S. to support the dollar was tested during the financial crisis of 1998 when the dollar fell 14% against the yen in one week, from 135.33 yen on October 5 to 116.4 yen on October 10. Gold during that week reflected the view widely held by market participants that the U.S. Treasury intervention was virtually guaranteed, and the gold price hardly moved. Yet, might some event occur to motivate the kind of extreme self-protective response from a foreign central bank alluded to by Hashimoto?..."
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