Japanese Yen recovers partially after record currency intervention

The Japanese Yen has recovered nearly half of the ground lost following a record-breaking single-session intervention. During that operation, 8.45 trillion Yen was deployed, followed by approximately 5.3 trillion Yen in coordination with the US Treasury, causing the pair to fall from nearly 164.00 to just above 155.00.

Despite these efforts, the Yen has continued to weaken, trading near 159.00. Market data suggests that Japanese institutional investors, including life insurers and pension funds, viewed the cheaper Dollar as an entry point rather than a warning, resulting in net purchases of over 5 trillion Yen in foreign equities and long-term bonds.

The persistent pressure on the Yen is driven by the significant interest rate differential between the Bank of Japan, which holds its policy rate at 1.00%, and the Federal Reserve, which maintains a target range of 3.50% to 3.75%.