Japan Steps In to Prop Up Yen Ahead of BOJ Policy Decision

Japan intervened in foreign exchange markets on Thursday, buying yen and selling dollars for the first time in three months. The move came as the yen continued to slide towards four-decade lows, threatening to worsen living costs hit by the energy shock from the Iran war.

The intervention was done in New York ahead of the Bank of Japan's policy decision on Friday, where the central bank is expected to keep interest rates steady at 1% but signal its readiness to continue pushing up borrowing costs.

U.S. Treasury Secretary Scott Bessent said that Japan may have intervened to prop up its yen currency, stating that it 'seems very undervalued to me.'

The Japanese finance ministry's foreign exchange division declined to comment on the matter, while the New York Federal Reserve also refused to confirm or deny any involvement in the intervention.