Japan may have spent as much as 5.01 trillion yen ($32 billion) in additional currency market interventions to support the yen during the Golden Week holiday period, according to central bank data cited by Reuters on Wednesday, bringing total estimated spending since late April to roughly $66 billion.
The latest suspected operations follow a larger intervention on April 30, when Tokyo stepped in for the first time since July 2024 after the yen weakened past the 160-per-dollar level. That initial action, estimated at around 5.4 trillion yen ($34.5 billion) based on Bank of Japan account analysis, triggered the yen’s largest single-day gain in over three years.
Repeated Rallies, Stubborn Resistance
Despite multiple sharp intraday surges during the holiday period, including a 1.8% spike on Wednesday that briefly pushed the yen to a 10-week high of 155.04 per dollar, the currency has repeatedly failed to sustain gains beyond the 155 level. By Thursday morning in Tokyo, the USD/JPY pair had settled back around 156.35.
Rodrigo Catril, a strategist at National Australia Bank, told Bloomberg that the recent movements exhibit characteristics typical of intervention, suggesting the Finance Ministry is trying to prevent the yen from approaching 160 while deterring speculators from shorting the currency.
Tokyo Signals Unlimited Resolve
Japan’s top currency diplomat, Vice Finance Minister for International Affairs Atsushi Mimura, said Thursday that the IMF’s classification of Japan as having a free-floating exchange rate does not restrict the frequency of intervention. He confirmed authorities are in daily contact with U.S. counterparts and declined to comment on specific currency levels or whether intervention had taken place.
“We’re targeting all angles,” Mimura told reporters when asked about the government’s approach to speculative currency moves.
IMF Constraints Loom
The assertive posture comes amid growing scrutiny of how many times Tokyo can act before testing international norms. A Finance Ministry official said Monday that under IMF guidelines, three consecutive days of intervention count as a single operation, and Japan can conduct up to three such operations within six months without risking a reclassification of its exchange-rate regime. That leaves Tokyo with limited windows for further action through November, raising questions about the sustainability of its defense strategy.
Goldman Sachs analysts estimated Japan possesses the reserves to intervene up to 30 times at the scale seen on April 30, but predicted officials will be selective with their firepower.
