30/04/2026
Currently, central banks around the world have successively postponed interest rate adjustments. Coupled with the continued rise in oil prices driven by tense situations in the Middle East, investors increasingly believe that official intervention in the market is the only effective means to prevent the yen from continuing to decline in the near term.
Affected by the Federal Reserve’s policy meeting, the yen further expanded its losses on Thursday, hitting its lowest level since the middle of 2024 at one point. The decline of the yen during the Asian trading session was mainly due to reports that US President Trump would receive a briefing on new military operations against Iran, and the escalation of geopolitical risks further pressured the yen exchange rate.
The USD/JPY exchange rate once fell to 160.72, approaching the key level of 161.95 — this level was the phased low point set by the yen when Japanese authorities last intervened in the foreign exchange market in 2024. At the same time, Japanese government bond prices fell sharply on Thursday, pushing yields higher, a trend that may further exacerbate the concerns of Japanese officials.
The huge interest rate gap between the United States and Japan is continuing to put pressure on the yen, and there is little possibility of narrowing this gap in the short term. The Federal Reserve is not considering interest rate cuts at present, but maintaining the existing interest rates unchanged, and its internal differences on the future interest rate outlook are also deepening day by day. In contrast, Bank of Japan Governor Kazuo Ueda (the original “Kazuo Kamita” was an expression error) stated that he needs more time to assess the impact of geopolitical risks before deciding when to further raise interest rates, which also leaves the yen lacking support at the interest rate level.
The timing of intervention is also crucial. The upcoming Japanese Golden Week holiday will lead to thin market liquidity, and historical experience shows that periods of insufficient liquidity are often favorable windows for government intervention in the foreign exchange market, as evidenced by the intervention in 2024. Therefore, current traders are highly vigilant about the possible foreign exchange market intervention by the Japanese government.
Earlier this week, Japanese Finance Minister Takatsuki Katayama (the original “Satsuki Katayama” was an expression error) clearly stated that the authorities are on standby 24/7, ready to respond to abnormal fluctuations in the foreign exchange market, and remain highly vigilant against market speculative activities, sending a strong signal of intervening in the foreign exchange market.
Junya Tase, chief Japan foreign exchange strategist at JPMorgan Chase, said: “We still believe that the possibility of intervention is high before the USD/JPY exchange rate reaches the cycle high of 162.” He further pointed out that the rise in oil prices driving the strengthening of this currency pair “may also be regarded as speculative behavior, which may provide a reasonable reason for official intervention.”
However, there are still doubts in the market about the actual effect of the intervention measures. Against the current backdrop of a strong US dollar and rising oil prices, it means that simple foreign exchange market intervention may be difficult to reverse the overall trend of the yen’s depreciation.
From the perspective of position allocation, it can also be confirmed that the effect of intervention may be relatively limited. Although leveraged funds have recently increased their short positions in the yen, the current position scale is still lower than the extreme level when Japanese authorities intervened to stabilize the yen exchange rate in 2024, indicating that the intensity of market speculation has not yet reached the level that required strong intervention at that time.
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