That’s a whopping figure as it is roughly equivalent to $73.4 billion in dollar terms. When compared with the previous intervention moves in 2022 and 2024, the size of this one beats out any of the singular period during those years. The total spent on interventions in 2024 is still more, with that being roughly $98 billion. However, that is spread out across April to May and also July during that year.
So far, this roughly $73 billion is coming during the course of just a week from the end of April to early May. The chart below points out when those likely points took place:
USD/JPY 4-hourly chart
Since then, USD/JPY has almost completely erased the point of the first intervention move back in late April. For now though, traders are still at least reserving caution in not wanting to incur the wrath of Tokyo officials near the 160.00 level. So, there is still some level of respect there.
But considering the amount spent by Japan’s ministry of finance, it definitely meant that they did not go easy with regards to the latest intervention move. The fact of the situation is just that the timing is rather poor and that is allowing for markets to push back harder.
The first point is that all the fundamental factors since the US-Iran conflict began have been overwhelmingly negative for the yen currency. The second is that the intervention timing was arguably not the best as they did it during a holiday period for Japanese markets in early May.
As mentioned at the time:
“It might sound counter-intuitive to not want to act during low liquidity periods, but there’s a certain nuance to it. The main thing about intervention isn’t so much so as the money but more so about the signaling. You want enough players in the market to get that signal and amplify it, so as to get the idea that “we shouldn’t mess with the MOF/BOJ”. Otherwise, that signal can get lost in translation if there isn’t enough liquidity follow through. And at the end of the day, it might just be passed off as more noise than an actual leading signal to traders.”
