By Megumi Fujikawa and David Winning
TOKYO--Japan spent more than $73 billion to support the yen over the past month, representing its first intervention since 2024 as officials grow concerned about a weaker currency driving up the cost of imports such as food and energy.
The yen has come under fierce pressure in recent months as the Middle East conflict spurs haven demand for the dollar. Japanese officials had tried to cool speculative activity by threatening to intervene, even using meetings with U.S. officials to discuss potential joint action.
On Friday, Ministry of Finance data showed that Japan spent a record 11.7349 trillion yen, or about $73.69 billion, on currency intervention between April 28 and May 27. It is the first time that officials have confirmed that they intervened in the period.
Market participants have long identified a level of 160 yen to the dollar as the threshold that could trigger intervention. When that level was breached in late April, it was quickly followed by the dollar sliding by more than 2% against its Japanese counterpart, prompting speculation among traders and analysts that Japanese authorities had intervened.
For Japan, the conflict in the Middle East is stoking concerns around inflation. The country of some 123 million people relies heavily on imports of essentials such as food and energy. Crude oil and natural gas are priced in dollars, so they become more costly for buyers such as Japan when their own currency falls in value.
Any sharp jump in import costs could compel the Bank of Japan to raise interest rates, potentially undermining the country's fragile economic recovery. Some economists expect the Bank of Japan to lift its policy rate to 1.0% at its next meeting in June from the current 0.75%.
At the same time, expectations that the U.S. Federal Reserve will need to raise interest rates have grown, despite public calls from President Trump for cuts.
Still, analysts say intervention is likely to be only a temporary salve for yen weakness, given the U.S. and Iran might not come to peace terms for some time and oil flows through the Strait of Hormuz could remain restricted.
"It's hard for intervention to stay effective unless there's something big enough to flip market sentiment and expectations upside down," former Bank of Japan Gov. Haruhiko Kuroda said earlier this month.
Evidence to support this view is already visible on markets. On Friday, the yen was weaker than 159 to the dollar, erasing most of the movement that followed the intervention late last month.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com and to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
May 29, 2026 08:33 ET (12:33 GMT)
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