Market News

The latest figures come as analysts try to gauge the scale of the latest salvo of yen buying and compare it with a similar campaign of intervention in 2024.

There was little gap between the forecasts issued Friday by the Bank of Japan and money brokers for how the central bank’s current account might have been affected by treasury fund flows on the previous day, suggesting little likelihood of unusual factors at play.

For data that indicate the size of currency interventions during Golden Week holidays, revised results also released Friday were roughly the same as the BOJ’s initial projections, pointing to the probability that the Finance Ministry spent about $30.6 billion to support the yen during the holiday period.

The yen touched a 10-week high of 155.04 per dollar on Wednesday after a sharp rally. It has since pared those gains, keeping the market on edge as participants eye the key 160 level, near where officials entered the market on several occasions in 2024.

Some money brokers say the initial projections by the central bank work better than their revised or final results, because the later figures also likely reflect other fiscal factors, such as the payment of taxes and pensions.

For the BOJ’s current account on May 7, the day for the settlement of intervention on April 30, the size of the contribution of treasury funds was revised lower by ¥1.5 trillion, an unusually large amount.

While analysis of the BOJ figures and actual interventions in 2024 shows no major difference in the reliability of the initial or revised figures, this week’s large revision has left some analysts wondering which figure to focus on.

The figure for last week’s intervention appears to have been significantly affected by fluctuations in tax payments to the national treasury, according to Yuichiro Takai, a researcher at Totan Research. Unexpected fund movements by foreign central banks holding deposits in BOJ accounts might also have been a factor, he added.

“As the BOJ is the executing body for foreign exchange intervention, the expected amount of intervention should already be accurately reflected in fiscal and other factors at the forecast stage,” Takai said. “Revisions in preliminary or final figures are more likely due to fiscal and other factors unrelated to intervention.”

Using the revised figures, Japan likely spent ¥8.65 trillion on interventions over the Golden Week period compared with ¥9.79 trillion in 2024.

But using the initial projections seen as more accurate by some market participants, the total so far this year comes to ¥10.08 trillion. That figure suggests the authorities are having more difficulty stemming the yen weakness this time around, given that they have been unable to strengthen the currency as much as they did two years ago.