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The US dollar maintained its strength above 161 yen in Tokyo trading on Friday, with the market largely ignoring a warning from Japan's Finance Minister about potential intervention against speculative yen weakness.
Japanese authorities are expected to continue intervening in currency markets to slow the yen's decline, following fresh support from the US Treasury Secretary. The yen has fallen to multi-decade lows against the dollar, pressuring Japan's economy. Analysts note a shift in US policy, as Washington no longer strongly objects to Japan's interventions.
US Treasury Secretary Scott Bessent said excessive volatility in foreign exchange markets is undesirable, warning it could disrupt trade and investment flows. The remarks come amid sharp currency swings and a strong US dollar, raising concerns about global economic stability.
U.S. Treasury Secretary Scott Bessent said on May 2 that excessive foreign exchange market volatility is 'undesirable' and he would maintain close contact with Japan's Ministry of Finance. The statement comes amid significant global financial market fluctuations, especially involving the yen-dollar exchange rate.
Japan likely spent up to 4 trillion yen ($26 billion) on suspected currency intervention in May to shore up the yen. The figure would be one of the largest monthly interventions on record. Officials have not confirmed the move, and analysts warn its impact may be short-lived.
Japan is estimated to have spent approximately ¥4 trillion ($25.6 billion) in May to support the yen via a suspected foreign-exchange intervention, its second such operation in two months. Market analysts based the estimate on BOJ account data, as authorities typically refrain from immediate confirmation. The action aims to counter the yen's sustained depreciation against the dollar.
