Overview
- The yen pressed the key 160-per-dollar level on Friday, prompting Finance Minister Satsuki Katayama to tell parliament that Japan stands ready to act at any time to curb excessive currency volatility.
- Japan’s foreign reserves fell by about $77.1 billion in May, the largest monthly drop on record, and market reporting says recent intervention episodes cost roughly $73 billion to temporarily push the yen higher.
- Analysts say the scale of reserve declines is consistent with large yen‑buying operations that may have been financed in part by selling U.S. Treasuries, which would narrow Tokyo’s room to maneuver.
- Many strategists warn intervention alone is unlikely to produce a durable yen recovery because U.S.-Japan interest-rate and growth gaps keep Japanese investors buying dollar assets and traders hold sizeable net-short yen positions.
- Key near-term signals to watch include the Bank of Japan’s June 15–16 meeting, U.S. jobs data, and oil and Middle East developments that could strengthen the dollar or change pressure on Tokyo’s intervention plans.