Japan Steps In to Prop Up Yen Ahead of BOJ Meeting

Japan has intervened in currency markets to buy yen and sell dollars after the Japanese currency slid to near multi-decade lows. The move comes ahead of the Bank of Japan's (BOJ) policy decision, which is expected to keep interest rates at 1%.

The intervention was spotted by Reuters, who reported trading that looked like 'spot intervention', the government selling dollars and buying yen, after USD/JPY touched 159.22. By Friday in Asia, the price had risen to around 159.63.

This is not Japan's first attempt to stabilize the currency. In late April and early May, it spent a record 11.7 trillion yen ($73 billion) on intervention, but the yen later slid again to below 163 per dollar.

The BOJ meeting will be closely watched for any signs of a clearer path to higher borrowing costs from Governor Kazuo Ueda. A more hawkish tone could make yen strength stickier by narrowing the interest-rate gap between Japan and the US, while a cautious message could leave the currency prone to sharp swings.

US Treasury Secretary Scott Bessent has said the yen 'seems very undervalued', which markets may read as Washington being tolerant of Japan leaning against sharp swings in the currency.