Japan likely spent ¥4 tril in suspected currency intervention in May

TOKYO — Japan likely spent an additional 4 trillion yen ($25.6 billion) to shore up the yen in another suspected market intervention following a yen-buying operation on April 30, a market estimate based on Bank of Japan data showed Thursday.

The latest estimate brings the total size of suspected operations in May and on April 30 to around 10 trillion yen.

On Friday, Monday and Wednesday, volatile moves were observed on the foreign exchange market, with the yen briefly jumping 1 to 2 yen against the U.S. dollar into the 155 zone, fueling speculation that the government conducted further rounds of intervention after doing so on April 30.

Japan's top currency diplomat, Atsushi Mimura, refrained Thursday from commenting on the yen's brief surge to the 155 zone the previous day, saying, "There is no particular need to make a comment."

On Wednesday, the yen, which was trading in the upper 157 range, hit the lower 155 level, its strongest point since late February. On Thursday, the Japanese currency was changing hands around the lower 156 range.

Also during the Golden Week holiday period, the yen briefly jumped to the upper 155 range from the lower 157 zone on Monday, while on Friday it rose to the mid-155 level from the lower 157 range.

Japanese authorities stepped into the currency market on April 30 after the yen's drop to the upper 160 level, according to government sources, in the first such intervention since July 2024.

Ahead of the intervention on April 30, Mimura, the vice finance minister for international affairs, joined Finance Minister Satsuki Katayama in stepping up warnings of "decisive action" to halt the yen's slide.

"The time for decisive action, which I have previously mentioned, is finally getting closer," Katayama said, advising reporters to hold on to their smartphones even during the Golden Week holidays, while Mimura called his warning against speculative movements "the final evacuation advisory" and said the holiday period had just started.

In July 2024, Japan disbursed a total of 5.53 trillion yen to support its home currency after it had weakened to around a 38-year low against the dollar near the 162 line.

Between April and May of the same year, it spent a record 9.79 trillion yen to slow the yen's rapid fall against the dollar.

The dollar has continued to draw buying as a safer asset since the United States and Israel launched attacks on Iran on Feb. 28. Elevated crude oil prices due to the effective blocking of the Strait of Hormuz, a key waterway traversed by many oil tankers, have also led to buying of the U.S. unit.

© KYODO