The Ministry of Finance in Japan has disclosed its limited capacity to support the yen, indicating a weak stance.

The BOJ initially intervened on a Japanese holiday, which was this Monday, followed by a second intervention just hours ago, during the morning in NZ. While both interventions had an impact and may be seen as successful, they underscore the limited capacity of both the BOJ and the Ministry of Finance. These instances highlight their reluctance to deplete their USD reserves excessively: Japan’s foreign exchange reserves are constrained, and the interventions in 2022 amounted to approximately US$62 billion. Despite discussions, it appears that they lack substantial support from the US beyond verbal assurances. So far, interventions have occurred during periods of thin market liquidity, indicating a cautious approach and a sense of operating independently.