Japan spends record ¥11.73tn defending the yen in a month as USD/JPY hovers near 160 intervention trigger

Japan's Ministry of Finance disclosed that authorities spent a record ¥11.73 trillion (about $73 billion at prevailing rates) supporting the yen between April 28 and May 27, 2026 — the largest monthly currency intervention on record and Tokyo's first since 2024 — as a wide BoJ-US rate gap and the energy-price shock pressured the currency. The intervention briefly pushed the dollar down about 1.7% against the yen in early May, its biggest such drop since February, but the gains faded and USD/JPY climbed back toward 159.9-160, the psychological level analysts (including at DBS and BNY) flagged as a likely trigger for renewed action.

Finance Minister Satsuki Katayama reiterated after the data release that authorities 'stand ready to take appropriate action at any time, as needed' and said Japan remained in close contact with US officials. Prime Minister Sanae Takaichi separately stressed efforts to bolster confidence in the yen by strengthening the domestic economy, supply chains and investment.

The episode underscored the tension between defending the currency and the inflationary pass-through from a weak yen amid surging imported food and energy costs, and it raised the stakes for the Bank of Japan's June 16-17 policy meeting, where markets saw a meaningful chance of a rate hike. Traders described the dynamic as the market 'testing Tokyo's resolve,' with intervention effectiveness limited so long as the rate differential persisted.