Japanese government intervenes in foreign exchange market for first time in 1 year and 9 months as yen weakens

[Financial News] The Japanese government and the Bank of Japan (BOJ) carried out large-scale intervention on April 30 local time, buying yen and selling dollars to defend the 160 yen per dollar level.
On May 1, Nihon Keizai Shimbun reported that a Japanese government official directly acknowledged the intervention in the foreign exchange market. It came just hours after top officials sent the market a "final warning." It was the first such move by Japan's foreign exchange authorities in about 1 year and 9 months, since July 2024.
The yen-dollar exchange rate, which had surged to the 160.7 yen range in Tokyo's foreign exchange market that day, quickly plunged by more than 5 yen after the authorities stepped in, falling to the mid-155 yen range.
Satsuki Katayama, Japan's Minister of Finance, said, "The time is finally approaching when we must take decisive action," while Atsushi Mimura, Vice Minister of Finance for International Affairs, warned speculators, "This is the final evacuation advisory."
Unlike past interventions, which were carried out secretly, the authorities acted after making their move public.
As soon as the psychological resistance line of 160 yen was broken, Japanese authorities moved immediately, sending a strong signal to the market that they would not tolerate that level.
Mimura also strongly suggested the possibility of further intervention on the morning of May 1, saying, "The long holiday is still in its early stages." Market participants are increasingly wary that a second round of intervention could come in the 158 to 159 yen range.
However, as the yen briefly strengthened following the intervention, companies that had delayed dollar purchases moved to buy dollars, suggesting that downward pressure on the yen remains.


june@fnnews.com Lee Seok-woo Reporter