The Bank of Japan's account data indicates that last Friday, Japan likely spent around $34 billion to intervene in the foreign exchange market to support the yen, a move that followed coordinated action with the United States the previous day. Based on a comparison between the Bank of Japan's accounts released on Monday and forecasts from money brokers, the estimated scale of this operation is roughly 5.33 trillion yen ($34 billion).
Japanese Finance Minister Katsunobu Kato confirmed earlier on Monday that Japan had entered the market last Friday. The Japanese authorities' continued purchases of yen highlight their determination to crack down on speculators betting against the currency. The yen fell to its lowest level in 40 years against the US dollar last month.
The US Treasury also joined the effort to support the yen last week, marking the most coordinated action on exchange rate policy in 15 years. Analysis of the Bank of Japan's accounts did not reveal the scale of US intervention in the market, but with Washington also participating, Japan could achieve the same impact on the yen with less spending.
Treasury Secretary Scott Bessent stated that the US would not hesitate to enter the market again, and President Donald Trump agreed, describing the intervention as a "symbol of friendship." As of Monday evening in Tokyo, the yen was trading around 156.92 against the US dollar, after rising to around 155.23 earlier in the morning. It remains unclear whether Monday's movements were another intervention or a reaction from nervous investors and algorithmic trading platforms to the news.
Before Japan's market intervention last week, the yen was trading near 164 against the US dollar, its lowest level since 1986. Japanese authorities used approximately 8.45 trillion yen to support the yen on Thursday, which, if confirmed, would likely be the largest single-day intervention in history. Traders remain on high alert for further joint action from both sides, with markets pricing in the possibility that the Bank of Japan could raise interest rates as soon as September.
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