Japanese Yen Surges 2%

The Japanese yen strengthened by more than 2% to below 157 per dollar, in what traders saw as intervention by the Bank of Japan. Earlier in the session, Japanese officials delivered a “final” warning against selling the currency, with Finance Minister Satsuki Katayama saying the timing for “decisive action” in the market was approaching. The currency had weakened past the 160-per-dollar mark on Wednesday, its lowest level since July 2024, when authorities last intervened to support it. Last week, the Bank of Japan kept its policy rate unchanged at 0.75% as it continues to balance inflation risks against slowing growth concerns linked to the Middle East conflict. Three of the nine board members voted in favor of a rate hike, and Governor Kazuo Ueda reiterated the central bank’s commitment to gradual tightening.

The Japanese yen weakened past the critical 160 per dollar threshold on Thursday, reaching its lowest level since July 2024, when authorities last intervened to support the currency. Traders increasingly built short yen positions, wagering that neither further interest rate hikes nor official intervention would provide meaningful support in the near term. Last week, the Bank of Japan kept its policy rate unchanged at 0.75% as it continues to balance inflation risks against slowing growth concerns linked to the Middle East conflict. Three of the nine board members voted in favor of a rate hike, and Governor Kazuo Ueda reiterated the central bank’s commitment to gradual tightening, though the yen continued to weaken regardless. Repeated verbal warnings from officials also failed to stabilize the currency, with Finance Minister Satsuki Katayama stating that authorities remain prepared to intervene in foreign exchange markets at any time to support the yen.

The Japanese Yen touched 160.47 against the USD, the lowest since July 2024. Over the past 4 weeks, US Dollar Japanese Yen gained 0.45%, and in the last 12 months, it increased 12.15%.