The yen fell to ¥159.94 per dollar, and Tokyo again signaled its readiness for unilateral intervention even after intervention totaling approximately $96 billion to defend the yen. The Finance Ministry's announcement, together with market moves, pointed to the view that the US-Japan interest-rate differential is weighing on the yen.
The yen fell to ¥159.94 per dollar on Thursday, its lowest level in more than two months. In response, Finance Vice-Minister Atsushi Mimura (三村 淳) said market moves were too rapid and suggested the possibility of renewed action based on past intervention.
Over 3 business days from 30 July to 3 August, Japan intervened to buy yen and sell dollars, with the total reaching ¥15.3993 trillion (approximately $96.3 billion). Some of the intervention was conducted jointly by Japan and the United States, on a scale equivalent to the first coordinated intervention since 1998.
After the intervention, the yen recovered from levels above ¥164 to around ¥155.23, but subsequently gave up much of that gain. According to Bank of Japan data, Thursday's trading range during Tokyo hours was ¥159.49 to ¥159.93.
The market expects the probability of a rate hike in December to remain high following strong US inflation data and hawkish remarks from Federal Reserve officials, while Japanese interest rates remain low and pressure for yen weakness persists. Tokyo is focused on ¥160 as a psychological threshold, but is expected to assess its next response carefully.