Japan Spent $68B on Yen Intervention Twice in Q2 2024

In the second quarter of 2024, Japan made major foreign currency market interventions, spending a record $68 billion to stabilize the yen. The Ministry of Finance carried out these measures on April 29 and May 1, according to a comprehensive report issued Wednesday.

Japan spent about ¥5.9 trillion (about $40.6 billion) on April 29 and ¥3.9 trillion on May 1. This large spending was intended to maintain the yen, which had fallen to its lowest level in decades. Despite these significant financial efforts, the interventions had only a brief impact and did not alter the fundamental market trend.

The report also stated that no other interventions happened after these two dates. According to previous estimates, Japan may have sold US Treasury bonds and other foreign assets to fund these actions. However, the immediate effect of these actions could have been more minimal. However, they did temporarily prevent some investors from betting against the yen due to concerns about future action.

To maintain the yen, Japanese policymakers spent an extra ¥5.5 trillion last month. A complete summary of these most recent measures is scheduled to be issued in November.

As Japan's attempts to reverse the yen's drop come to a close, the currency has lately exhibited a robust comeback, backed by a shrinking interest rate disparity. Last Monday, the Bank of Japan increased its policy rate by 0.25 percentage points to 0.1% and announced a decrease in asset purchases. Following recent market disturbances, there is also speculation that the Federal Reserve would decrease interest rates by a higher amount than predicted.

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