Market players estimated that Japan spent approximately 5 trillion yen, equivalent to $31.7 billion, in a suspected intervention on April 29 to prevent the yen from further weakening beyond the 160-yen mark. This move, which the government has not officially acknowledged, is believed to have involved the purchase of yen and selling of dollars, ultimately preventing a significant decline in the yen's value.
On April 29, the yen dropped to the 160-yen level against the dollar in Asian trading for the first time in 34 years while Tokyo markets were closed for a national holiday. However, the currency quickly rebounded to the mid-154-yen level, with sporadic bouts of yen-buying occurring whenever it seemed to be trending towards further depreciation. Foreign exchange interventions typically see the Finance Ministry instruct the Bank of Japan to engage in buying or selling currencies to or from private financial institutions, impacting the central bank's current account balance, which is disclosed a couple of business days later.
Trading sources indicated that the estimated 5.5 trillion yen discrepancy between Central Tanshi Co.’s forecast and the Bank of Japan's forecast for the May 1 final balance likely aligns with the size of the suspected intervention on April 29. These interventions in 2022, aimed at supporting the yen, have collectively involved the expenditure of approximately 9 trillion yen. As of 5 p.m. in Tokyo on April 30, the yen was trading at 156.85-87 against the dollar, displaying a 15-yen depreciation compared to the same time on April 26, with the Finance Ministry expected to confirm whether intervention took place at the end of May.