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Intervention · Japan · Monetary Policy · Yen
Japan's Chief Cabinet Secretary Minoru Kihara affirmed the government's readiness to intervene "at any time" to counter the yen's slide, which briefly hit 160.795 per dollar, erasing all gains from the record 11.7 trillion yen ($72.87 billion) intervention in late April and early May.
The yen's renewed weakness persists despite the Bank of Japan's recent rate hike to 1%, a 31-year high, as the Federal Reserve maintained its 3.50%-3.75% range and signaled a potential future hike. This widening interest rate differential fuels speculative net short yen positions, which climbed to the highest since July 2024.
Finance Minister Satsuki Katayama previously warned authorities were "always prepared to take decisive measures," while top currency diplomat Atsushi Mimura remained silent since early May. Analysts like Ataru Okumura of SMBC Nikko Securities state the Bank of Japan will be forced to raise interest rates slightly earlier than anticipated.
Seisaku Kameda, former BOJ economist, indicates the BOJ's rate hike aims to forestall inflation risks, with further hikes expected in October or December.