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Japan finance minister declines to weigh effectiveness of yen intervention

Reported · Written up by our desk · Central Banks

Japan’s Finance Minister Satsuki Katayama declined to comment on the effectiveness of joint yen-buying intervention with the US Department of the Treasury, Reuters reported Tuesday. Katayama had said earlier Monday that Tokyo and Washington conducted coordinated yen-buying intervention and would not hesitate to take further action.

The yen’s value is influenced by multiple factors, including Bank of Japan policy and the interest-rate gap versus the United States, as well as broader risk sentiment among traders. The Bank of Japan has a currency-control mandate and has intervened directly at times, generally aimed at lowering the yen, though it has refrained from doing so often due to political concerns with trading partners.

The BoJ’s ultra-loose policy from 2013 to 2024 contributed to yen depreciation as policy divergence from other central banks widened, including versus the Federal Reserve. More recently, the BoJ’s gradual unwinding of that stance has supported the yen by narrowing the differential between 10-year US and Japanese bonds, which has historically favored the US dollar against the yen.

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