Japan Breaks Yen Intervention Record Amid Persistent Pressure

Japan's Ministry of Finance (MOF) released data showing that authorities conducted a record single-day yen-buying intervention in April, selling $40 billion of the country's currency reserves. The largest operation amounted to 6.28 trillion yen ($39.64 billion) on April 30, surpassing the previous single-day record of 5.92 trillion yen set on April 29, 2024. This intervention helped lift the yen from a near two-year low of 160.725 per dollar to around 155 by May 6, but did not reverse the currency's broader downtrend.

The yen resumed its downturn, sliding to 40-year lows below 163 per dollar in July, prompting Japan to intervene again last week, this time in coordination with the U.S. Central bank data indicated Japan may have spent as much as $58.97 billion on July 30 and $36.58 billion on the following day.

Tokyo and Washington have said Japan could utilise a COVID-19 era Federal Reserve backstop for major central banks, introduced in 2020 to steady markets during the pandemic. This facility allows Japan to raise dollar liquidity without outright sales of U.S. Treasuries, potentially easing funding pressure on Tokyo for intervention.