Analysts say sustained yen strength requires Bank of Japan policy shifts, not just currency intervention, to attract foreign inflows.
The USD/JPY pair climbed to 157.80 in European trading Thursday, recovering from a three-day slide as traders booked profits on the yen following last week’s US-Japan joint intervention. The move eased pressure after the yen surged on coordinated efforts to curb excessive volatility in currency markets.
Prior to the intervention, the yen had weakened sharply, with USD/JPY trading near multi-decade highs above 160.00. Analysts at BNY Mellon noted that while the intervention stabilized positioning, foreign investors remain net long JPY at levels below early 2026 peaks, citing a lack of structural domestic reforms to sustain demand.
Japan’s Finance Minister Satsuki Katayama reiterated this week that Tokyo will not hesitate to act again with Washington to support the yen. Market focus now shifts to potential follow-through from the Bank of Japan, including policy tightening or fiscal measures, to reinforce intervention effects.