Bessent backs Japan's yen intervention as USD/JPY crashes 500 pips

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[1] US Treasury Secretary Bessent: Yen is "very undervalued" — Backing Japan's Intervention (https://wallstreetcn.com/articles/3778377 ...)[2] Dollar drops most since 2022 as Japan strikes yen market after Fed's three-way split (https://www.msn.com/en-us/money/economy/dolla ...)[3] Japan intervenes to prop up yen ahead of BOJ policy decision, source says (https://www.reuters.com/world/asia-pacific/ja ...)[4] Has intervention finally begun? The USD/JPY exchange rate falling below the 159 mark sparks speculation of market intervention! - 富途牛牛 (https://news.futunn.com/en/post/76867706/has- ...)[5] USD/JPY fell from 163.50 through 161.00 on suspected Ministry of Finance yen buying | That's TradingNEWS - TradingNEWS (https://www.tradingnews.com/news/yen-surges-a ...)

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BOJ holds at 1% as yen intervention shifts focus to Ueda's tone

**Japan's suspected yen-buying intervention and the BOJ's rate decision have converged, putting Governor Kazuo Ueda's forward guidance under intense scrutiny.** The Bank of Japan held its policy rate at 1% on Friday as expected, but Governor Kazuo Ueda's post-meeting press conference carries outsized weight after Japanese authorities intervened to prop up the yen a day earlier, sending the dollar down as much as 3% to 158.34. "The timing was faster than expected as I saw a good chance of intervention after the BOJ's policy meeting," Toru Suehiro, chief economist at Daiwa Securities, said. "If the U.S., as reported, has conducted rate checks and may be endorsing a weak dollar, that's positive for the Takaichi administration." The dollar fell by as much as 3% to 158.34 yen on Thursday, its biggest one-day drop since late 2022, after touching 40-year highs near 164 yen earlier this week. Trading volumes surged, with Citi's eTrading desk recording an estimated $8.1 billion in dollar-yen selling across core currency venues between 0930 and 0940 ET. U.S. Treasury Secretary Scott Bessent said the yen "seems very undervalued," according to a Fox Business Network reporter, while the Nikkei newspaper reported U.S. authorities conducted rate checks — precursors for currency intervention. The yen also jumped more than 2% against both the euro and the pound and nearly 2% against the Australian dollar. The intervention, Japan's first since it spent a record 11.7 trillion yen ($73 billion) in April and May, shows the Takaichi administration's determination to combat a weak yen that has pushed up import costs and strained household purchasing power. Markets now await Ueda's guidance on the pace of future rate hikes, with the BOJ governor caught between a dovish administration wary of further tightening and the need to prevent yen weakness from fueling broader inflation. The yen's slump to four-decade lows below 163 per dollar earlier this month had kept markets on edge despite repeated warnings from Finance Minister Satsuki Katayama of "decisive" action. Thursday's intervention caught many off guard by arriving before the BOJ meeting rather than after, a departure from the calibrated jawboning that preceded previous bouts of yen-buying. Mizuho Bank senior strategist Masayuki Nakajima noted that previous Japanese currency intervention had been conducted on the day after the Fed meeting. The vote split on Friday's rate decision has not yet been disclosed. The central bank is expected to deliver hawkish messaging that leaves scope for further hikes, though the pace remains uncertain given political pressure from Prime Minister Sanae Takaichi's administration, which has prioritized fiscal spending over monetary tightening. OIS markets had priced a high probability of a hold, with the focus squarely on Ueda's communication about the future rate path. The last time Japan intervened in April and May, the brief boost to the yen was quickly wiped out as the currency resumed its downtrend. The question now is whether authorities will keep pushing until the dollar breaks below the 155-yen line, as Yuji Saito, executive advisor at SBI FX Trade, put it. The answer may depend on how hawkish Ueda sounds on Friday — and whether the BOJ's messaging convinces markets that Japan's era of ultra-low rates is truly ending. This article is for informational purposes only and does not constitute investment advice.

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Nikkei surges 2.7% as electronics, bank stocks rally on US tech gains

**Japan's benchmark index rebounded as investors piled into electronics and banking shares after a strong session on Wall Street.** The Nikkei 225 rose 2.7% in early trade Wednesday, led by electronics and banking stocks after gains in US technology shares overnight lifted risk appetite across Asian markets. "The move reflects a rotation back into Japanese equities after recent volatility, with the overnight rally in US tech names providing a clear catalyst for buying," said Kieron Poon, investment director of Asian equities at Aberdeen Investments. Electronics stocks led the advance, with semiconductor-related names rebounding after a sharp selloff earlier in the week that erased about $1.3 trillion from the world's largest chip stocks. Banking shares also gained, supported by expectations that higher Japanese interest rates could improve lending margins. The broader Topix index traded higher, tracking the Nikkei's upward momentum. The rally comes after a turbulent period for Japanese equities, which had been caught up in a global semiconductor rout. The Philadelphia Semiconductor Index fell nearly 20% over the past month before stabilizing this week, as investors reassessed valuations in AI-linked chip stocks that had surged more than 90% over the prior 12 months. "The recent pullback in AI-related chip stocks reflects investors giving back a little bit of the froth that was in the AI market," David Riedel, founder and president of Riedel Research Group, told CNBC. He added that memory chipmakers "will be fine" but needed to "give back some of those sudden gains." The Nikkei's bounce suggests investors are distinguishing between the correction in overvalued semiconductor names and the broader recovery story in Japanese equities, where corporate governance reforms and a weaker yen have drawn foreign inflows. The yen traded near 153 against the dollar, providing additional support for export-oriented electronics and auto stocks. This article is for informational purposes only and does not constitute investment advice.