Japan Spends Record 11.7 T. Yen in April-May Forex Interventions

Tokyo, May 29 (Jiji Press)–Japanese authorities spent 11,734.9 billion yen in foreign exchange market interventions from April 28 to Wednesday, with the amount hitting a record high on a monthly basis, the Finance Ministry said Friday. The dollar plunged against the yen on April 30 and between May 1 and 6, which prompted speculation that the Japanese government and the Bank of Japan had intervened in the market several times to curb the yen’s rapid fall. The amount for each day of intervention is expected to be announced in August. It was the first intervention since July 2024. The scale of the latest interventions far exceeded the previous monthly record high of 9,788.5 billion yen from late April to late May of the same year. On the night of April 30 this year, the dollar plunged from around 160 yen to around 155 yen, soon after Japanese Finance Minister Satsuki Katayama referred to taking “decisive action.” Echoing Katayama, Vice Finance Minister for International Affairs Atsushi Mimura said, “This is our final advisory.” It is believed that authorities conducted interventions worth 5 trillion to 6 trillion yen on the day. On May 1, 4, and 6, the dollar tumbled against the yen intermittently, leading to market speculation of interventions totaling 4 trillion to 5 trillion yen. At the time of the intervention on July 11, 2024, the dollar dropped from around 161 yen to around 157 yen. It is highly likely that Japanese authorities have set their defense line around 160 yen, market sources said. After a meeting with U.S. Treasury Secretary Scott Bessent on May 12, Katayama said, “We confirmed that Japan and the United States cooperate closely,” hinting that Japan has gained U.S. understanding regarding currency interventions. On the other hand, there is a strong view that the yen’s weak trend will not change, due to the prolonged U.S.-Iran conflict and high crude oil prices. There is also a limit to the amount of foreign exchange reserves available to finance interventions. At 5 p.m. Friday, the dollar stood at 159.25-27 yen. END [Copyright The Jiji Press, Ltd.]