Japan used ¥14 trillion to prop up JPY
Japan recently intervened in the foreign exchange market, using a record amount of ¥14 trillion to support the Japanese Yen.
The intervention triggered a sharp but temporary rally in the JPY, with USD/JPY slumping from an intra-day high of 163.74 on July 30 to reach a low of 155.23 on August 3.
The market narrative is already slipping back into skepticism over the effectiveness of Japan’s intervention, despite the coordinated US-Japan action and ample reserves.
The Bank of Japan’s policy remains near the lower end of its neutral range, with risks viewed skewed toward further hawkish repricing.