Government and Bank of Japan intervention involving yen purchases and dollar sales from the end of July through late August totaled ¥15.3993 trillion, the largest monthly amount on record. Whether further intervention will be conducted and how the Bank of Japan will respond are now the focus.
Intervention involving yen purchases and dollar sales conducted from 30 July to 26 August totaled ¥15.3993 trillion, exceeding the ¥11.7349 trillion conducted in April-May this year to reach the largest amount on record. The intervention period was 30 July to 26 August, and reports said that the Japanese and US governments coordinated their response.
According to government officials, authorities intervened on 30 July when the yen moved to the ¥163 level, and Japan and the US conducted coordinated intervention the following day, on 31 July. The US was reportedly viewed as having taken the unusual step of selling euros and buying yen, and the coordinated intervention was said to be the first since the G7 intervention following the 2011 earthquake.
Japan's and the US's finance authorities announced the coordinated intervention on 3 August. Minister of Finance Katayama Satsuki (片山さつき) said, “We addressed the excessive fluctuations and disorderly movements in the yen seen recently,” and was reportedly suggesting that further intervention could be conducted.
The yen moved to the ¥159 level on the morning of the 28th, and market vigilance over further intervention remains. The focus has shifted to the possibility of an additional rate hike at the Bank of Japan's September Monetary Policy Meeting and the Bank's response to it.
Against this backdrop, with downward pressure on the yen remaining as the interest-rate differential between Japan and the US stays wide, attention is focused on the future actions of the government and the Bank of Japan.