Intervention Data Eyed as Yen Edges Back Toward 160 Per Dollar

02}42b4dby31i617l3nb6qyn_media_dl_1.png Bloomberg, Japan's Ministry of F

Article content

(Bloomberg) — Currency traders are counting down to Friday for an official figure from Japan’s finance ministry that will show how aggressively authorities intervened to support the yen over the past month.

Article content

This comes as the yen remains under pressure near 160 per dollar, having given up the bulk of the gains it made in late April and early May when the ministry ordered the central bank into the market to defend the currency. It was down slightly to 159.60 as of 1:04 p.m. in Tokyo, with traders alert to the risk of further intervention.

Article content

Article content

Article content

Initial analysis of Bank of Japan accounts by Bloomberg indicates that about as much as ¥10 trillion ($63 billion) was spent to bolster the yen from April 30 through to the end of the nation’s Golden Week holidays on May 6. While Japanese officials have declined to comment directly on whether they intervened, a person familiar with the matter said it took place on April 30 and price moves through May 6 bear the hallmarks of government purchases.

Article content

Article content

“The MOF data is crucial,” said Masahiko Loo, senior fixed income strategist at State Street Investment Management. “A print meaningfully above ¥10 trillion underscores policy commitment.” Loo said that if the exchange rate does not hold even after spending that amount, it could raise questions about intervention’s effectiveness.

Article content

A lower level of intervention could mean Japan is making deployments tactically or there is a greater reliance on underlying market dynamics, Loo added.

Article content

Read: Japan Spent Billions and Yen Is Still Falling

Article content

The data is scheduled to be announced at 7:00 p.m. local time on Friday, showing the total intervention amount for April 28-May 27. The finance ministry typically releases daily operational data in August.

Article content

Article content

Japan’s currency saw multiple bouts of gains in May, sparking debate among investors as to whether the finance ministry is conducting smaller operations. While the MOF data on Friday will not provide a daily breakdown, traders may speculate based on the figure whether mini-interventions occurred.

Article content

The authorities have a history of pairing large currency interventions with smaller ones. In late 2022, a ¥729.6 billion yen-buying operation followed a much bigger ¥5.62 trillion intervention aimed at slowing yen weakness.

Article content

Read: Curious Yen Spikes Have Traders Gaming Japan ‘Warning Shots’

Article content

If the data implies that the finance ministry was carrying out smaller interventions, “the market is probably going to prepare for a more active intervention stance,” said Shinichiro Kadota, head of Japan FX and rates strategy at Barclays Securities Japan Ltd. “But it also could simultaneously raise the question that if they were doing it, why was it not really working.”

Article content

When Japan last intervened in 2024, it spent ¥5.5 trillion over the period from June 27 to July 29. The amount was largely in line with earlier estimates based on the BOJ’s accounts and money broker forecasts.