Japanese Intervention Sparks Credibility Concerns

The recent intervention by Japan's Ministry of Finance in the foreign exchange market has raised questions about its credibility. According to BNY's Geoff Yu and David Tam, the US Dollar/Japanese Yen (USD/JPY) pair is pushing higher again after the intervention, with the Japanese Yen having already surrendered much of its gains.

The pair's current price is not a specific figure in the source, but it is mentioned as being above 160. Yu and Tam argue that if this level is broken, it would put pressure on Japanese authorities to adjust their policy approach if they truly want a stronger Yen.

U.S. Treasury Secretary Scott Bessent has acknowledged that the joint action was only a 'signal', and Tokyo needs to follow through for intervention to be an effective tool. If not, it would undermine the credibility of intervention as a policy tool.