The Above Line Chart Is of USDJPY from 02nd Jan 2023 to 02nd May 2024

Last week, in a holiday thinned trading, Japanese Yen hit an intra-day low of 160.17 – which is also 34-year low against the USD. BoJ held their monetary policy meeting, but their statement did not mention much about the JPY weakness. Meanwhile, on Friday, the Japanese Government had intervened in the FX market and saw the Yen surging to 154 level. There were also rumors that the Japanese government might have intervened again on Thursday, driving the JPY to as high as 153 per dollar. Information available in public domain indicate that the BOJ might have spent between 3.26 -3.66 trillion on May 1.

Japan’s government refused to confirm whether it was behind the short-lived rallies in the yen this week, although op currency diplomat Masato Kanda said they will disclose results at the end of next month and will take appropriate action in the FX market as needed. A report also suggested that Japan might introduce incentives for companies to convert profits into yen with tax breaks. The yen lost more than 10% against the dollar so far this year as the Bank of Japan kept interest rates ultra-low, prompting traders to borrow yen and invest in higher-yielding currencies. Yen bears will now be very cautious, as the BOJ and the Japanese Government appear to be truly concerned about the JPY weakness.