(Bloomberg) -- Japan’s currency intervention to support the yen in the past month was worth ¥5.5 trillion ($36.6 billion), as the government showed its willingness to counter speculators betting against the yen.
The finance ministry disclosed figures Wednesday for the period between June 27 to July 29. The amount was largely in line with earlier estimates based on the Bank of Japan’s accounts and money broker forecasts.
The July intervention followed similar actions in April and May, underscoring the government’s commitment to keeping speculators on the back foot. The latest action appears to have helped reverse the tide on the yen’s weakness, helped in part by heightened speculation that the gaping rate differential between Japan and the US will begin to narrow.
The yen was little changed against the dollar following the data release, after it had gained 1.7% over the course of the day.
During the reporting period, the yen experienced two notable gains. The first move came on the evening of July 12 after the release of weaker-than-expected US inflation data, when the currency appreciated sharply against the dollar from 161.58 to 157.44. The second action likely followed on the next business day, when the yen gained by as much as 0.9%. Since then, the Japanese currency has made significant gains.
“It was a good timing for the government to intervene in the market — just when the yen was about to appreciate,” said Tohru Sasaki, chief strategist at Fukuoka Financial Group Inc.
Meanwhile, given how much Japan has used already to step into markets this year, “it would be quite difficult for authorities to spend the same amount again if the yen returns to its previous low,” said Sasaki. Interventions since April have so far has cost the country around ¥15 trillion this year.
Earlier estimates comparing the BOJ’s current accounts data’s final version with money broker forecasts suggested that Japan had likely spent around ¥3 trillion and ¥2 trillion on these operations, respectively. Those projections can vary from the actual amount that’s eventually confirmed by finance ministry data.
Wednesday’s intervention data came hours after the BOJ’s decision to hike rates again and unveil slightly faster than expected bond purchase cuts. The central bank raised its policy rate to around 0.25% from a range of 0 to 0.1%, and also unveiled plans to halve its bond purchases by the first quarter of 2026. After Governor Kazuo Ueda’s press conference, where he didn’t rule out additional rate increases, the yen strengthened further.
Atsushi Mimura, who succeeded Masato Kanda as the country’s top currency chief Wednesday, told Bloomberg on Monday that intervention remains a method to counter speculation. He also said the demerits of the recent weak yen are becoming more noticeable on balance, given the impact of higher import costs on households and small businesses.
Following the suspected interventions in July, Finance Minister Shunichi Suzuki and Kanda declined to comment on whether they had stepped into the market, maintaining their strategy of keeping investors guessing. Mimura appeared to suggest he may continue with that stance.
Further details of this month’s market actions, including daily amounts and the specific markets the government entered, will be released in November. Separately, foreign reserves data due next week will provide clues on whether the government sold treasuries or used deposits to fund the yen-buying operation.
(Updates with economist comments, more details)
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