The yen has fallen to the ¥159 range per dollar, marking three consecutive business days of depreciation. Real-demand yen selling has been the main driver, and the situation is said to be one that Japanese authorities cannot reverse through intervention alone.
In the Tokyo market, the yen fell to the ¥159 range per dollar, marking a third consecutive business day of depreciation. Despite coordinated intervention by Japan and the United States, the yen has not escaped its downward trend.
According to Mizuho Bank, based on CFTC data, speculative short-yen positions stood at approximately $4 billion as of the 18th, down sharply from previous levels. Instead, yen selling for real-demand transactions, including corporate trade settlements, is considered the primary cause of the yen's depreciation.
Against the backdrop of the prolonged Middle East conflict since April, import price inflation has exceeded the rate of export price inflation, creating an inversion. Rising import prices are prompting companies to procure dollars and are contributing to increased selling pressure on the yen.
There are limits to curbing yen depreciation through Bank of Japan rate hikes, and as the market is currently pricing in an additional rate hike in the autumn, the prevailing view is that the resulting effect on the yen would be limited.