Japan's Q2 Yen Interventions Fail to Halt Currency's Slide

Japan's Ministry of Finance has disclosed details of its foreign exchange interventions from April to June, revealing that three separate operations during the quarter failed to reverse the yen's persistent decline against the U.S. dollar.

The government and the Bank of Japan conducted dollar-selling, yen-buying interventions on April 30, May 4, and May 6, spending a combined ¥11.73 trillion (approximately $74.1 billion). The largest single-day action occurred on April 30, with a record ¥6.28 trillion deployed, surpassing the previous high of ¥5.92 trillion set on April 29, 2024. Additional amounts of ¥780.2 billion and ¥4.68 trillion were used on May 4 and May 6, respectively.

Prior to these interventions, the yen had weakened to the upper 160 range against the dollar. While the currency saw a temporary rebound, the gains were short-lived. By late July, the yen had slid further to near 164 per dollar.

Analysts broadly suggest that without changes to underlying economic fundamentals, currency intervention alone is unlikely to reverse the yen's decline.

In a related development, Finance Minister Satsuki Katayama confirmed on Monday that Japanese and U.S. authorities carried out a coordinated yen-buying intervention in New York trading hours on July 31—the first such joint action in 15 years. Following that operation, the yen briefly strengthened to the lower 155 range before retreating to around 158 per dollar by Friday.