The intervention shows that Prime Minister Fumio Kishida’s government has reached the limit of its patience after the yen tumbled around 20% against the dollar this year as hedge funds kept adding to short bets on the yen. The question now is whether the unilateral action will work, with the currency already paring gains within hours.
Japan intervened to prop up the yen for the first time since 1998, after its central bank sparked further declines in the currency by sticking with ultra-low interest rates as its global peers hiked.
The yen rose as much as 2.5% against the dollar, pulling back sharply from the lows of the day when it had breached a key psychological level of 145, as top currency official Masato Kanda said Thursday the government was taking “decisive action.”
