Japan Intervenes in Forex Market Ahead of BOJ Policy Decision

Japan intervened in foreign exchange markets on July 30 to prop up the yen ahead of the Bank of Japan's (BOJ) policy decision on July 31. The intervention, which was not confirmed by authorities, came as the currency slumped to four-decade lows due to the Iran war-driven energy shock.

The move is the first such intervention in three months and follows repeated threats from Japanese Finance Minister Satsuki Katayama of 'decisive' action to combat a weak yen. The government has warned that the currency's weakness exacerbates the cost-of-living impact of rocketing energy import prices.

Markets have been on edge, with analysts expecting the BOJ to keep interest rates steady at 1 per cent but signal its readiness to continue pushing up borrowing costs. BOJ governor Kazuo Ueda is expected to provide guidance in his post-meeting news briefing.