Japan Intervenes in Foreign Exchange Markets to Prop Up Yen

Japan intervened in foreign exchange markets for the first time in three months to prop up its yen currency. The move, which occurred on Thursday in New York, came ahead of the Bank of Japan's policy decision on Friday. According to a market source, Japan conducted dollar-selling intervention, buying back yen and selling dollars to stabilize the currency.

The intervention was a response to the yen's slump to four-decade lows, threatening to worsen living costs exacerbated by the Iran war-driven energy shock. Finance Minister Satsuki Katayama declined to comment on the intervention but hinted at US involvement, saying 'we are receiving support from the United States that goes beyond psychological support'.

U.S. Treasury Secretary Scott Bessent was quoted as saying Japan may have intervened to prop up its yen currency, adding 'the yen seems very undervalued to me.' The dollar sank to a more than two-month low against the Japanese yen on Thursday in what analysts said looked like official intervention.