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Englishعربي
Japan intervened in the foreign exchange market with an estimated $35 billion to bolster the weakening yen, according to Bank of Japan data released on Friday. The move, believed to be the country's first official currency intervention in nearly two years, triggered a sharp surge in the yen's value against the dollar, marking its biggest gain in three years.[1][2]
Hours after the intervention, the yen jumped more than 2%, reaching as high as 155.5 yen per dollar before trimming some gains to around 156.99. Traders and strategists pointed to the abrupt market movement as clear evidence of government action, with Japan's Nikkei newspaper citing a government official who confirmed Tokyo bought yen and sold dollars. Asharq Al-Awsat reported the yen's rise on Friday, linking it directly to widespread belief in Tokyo's support for the currency.[1][2]
Top Japanese officials, including foreign exchange diplomat Atsushi Mimura, issued strong warnings shortly after, signaling readiness for further interventions to deter speculators exploiting thin market liquidity. This followed remarks from another official, Masahiro Katayama, and came amid speculation that Japan acted just hours after such statements. The Finance Ministry has not yet commented officially, but U.S. economic officials were notified in advance, aligning with Group of Seven agreements to alert counterparts during interventions aimed at curbing excess volatility.[1]
The intervention addresses persistent pressure on the yen, driven primarily by wide interest rate gaps between the U.S. and Japan, where higher American rates attract capital away from the lower-yield yen. Despite the initial boost, analysts note the currency remains vulnerable, still trading above the 160 yen per dollar threshold that Japanese authorities view as a key intervention trigger. By Friday, the yen had softened somewhat, with the dollar-yen pair climbing back 0.4% to 157.01.[1][3]
This action matters for global markets, as a weaker yen has fueled Japan's export competitiveness but raised import costs for consumers and stoked inflation concerns at home. Households and businesses reliant on imported energy and food are among those most affected, while exporters benefit from the depreciation. Investors worldwide watch closely, as repeated interventions could signal escalating currency tensions.
Looking ahead, Tokyo's explicit readiness to act again puts speculators on notice, potentially stabilizing the yen in the short term. However, lasting relief depends on narrowing interest rate differentials, which hinge on monetary policy shifts from both the Bank of Japan and the U.S. Federal Reserve. Markets will scrutinize upcoming economic data and official statements for signs of escalation.[1][2]