TOKYO, May 29 : As Japan's yen drifts back to levels that prompted official intervention a month ago, markets are sizing up Tokyo's remaining financial firepower and political will to defend its ailing currency.Japan spent about $63 billion in what were suspected to be multiple bouts of yen-buying intervention at the end of April and early May, a small fraction of its $1 trillion war chest. But traders think that spending all of that, or even much of it, is unrealistic. And as speculative bets against the yen creep up again, authorities will be looking to keep markets on edge."The more foreign reserves shrink, the more vulnerable Japan looks to speculators," said Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities. With yen-selling pressure showing no sign of easing, "the war of nerves between the authorities and the market looks set to continue."Yen-buying intervention requires selling foreign assets, of which Japan held about $1 trillion at the end of April. After subtracting the roughly 10 trillion yen ($62.78 billion) deployed in the April and May actions, based on calculations of Bank of Japan money market data, that leaves about 150 trillion yen, or enough for "around 30 rounds" of intervention, according to Goldman Sachs economist Yuriko Tanaka.
Yen back in danger zone as Tokyo officials keep investors on edge
TOKYO, May 29 : As Japan's yen drifts back to levels that prompted official intervention a month ago, markets are sizing up Tokyo's remaining financial firepower and political will to defend its ailing currency.Japan spent about $63 billion in what were suspected to be multiple bouts of yen-buying interventio
Japan spent ~$63 billion in suspected yen-buying intervention in late April and early May, pushing USD/JPY back toward 159.65 — near the threshold that triggered action a month ago. With the BOJ maintaining a cautious rate stance and ~$1 trillion in reserves theoretically available but politically and diplomatically constrained, the yen-dollar rate remains a live risk for any CFO or treasury team with JPY exposure or Japan-based operations.
