Japan Steps In to Support Yen Ahead of Central Bank Decision

Japan's central bank has taken steps to prop up its currency ahead of a policy decision. According to a market source, the Bank of Japan conducted yen-buying, dollar-selling intervention in New York markets on July 30.

The move came as the Japanese finance ministry had warned of action to address the yen's weakness, which is exacerbating the cost-of-living impact of rocketing energy import prices. The US Treasury Secretary Scott Bessent said that Japan may have intervened to prop up its yen currency, adding that the yen 'seems very undervalued to me'.

The dollar had sunk to a more than two-month low against the Japanese yen on July 30, hitting 159.22 per dollar before intervention. After the move, the yen stood at 159.63 in Asia on July 31.

Markets have been on alert for yen-buying by Japanese authorities ahead of the Bank of Japan's policy decision on July 31, where interest rates are expected to remain steady at 1 per cent but may signal a readiness to continue pushing up borrowing costs.