Japan’s Top FX Official Says Yen Intervention Worked, US Was Supportive

Japan’s top currency official, Atsushi Mimura, says the government’s intervention to support the yen two months ago was successful. He also claimed that United States authorities backed the move.

“Judging from how the market moved afterward, I think it clearly had meaning,” Mimura said in an interview with Bloomberg on Wednesday. He is Japan’s vice finance minister for international affairs.

“I’m not aware of the US ever making a single comment expressing disagreement with what we did, and if anything, there have actually been comments that were more supportive,” he added.

Mimura spoke as the yen slid to a fresh 40-year low against the dollar. The weakness creates the risk of faster inflation in a country that imports most of its energy and more than half its food.

The yen was trading around 162.80 to the dollar midday Wednesday in Tokyo. That is near the weakest level since 1986.

Mimura stressed that he communicates frequently with his US counterparts. “With phone calls and emails, I’m in touch with my counterpart far more frequently than most people probably imagine,” he said.

Traders remain on alert for more intervention. Japan stepped into the market on April 30 when the yen approached the 161 level. The government spent a record ¥11.73 trillion ($72.3 billion) in the month through May 27 to support the currency.

The yen initially gained after that intervention, moving to around 155 per dollar. But it steadily lost those gains even after the Bank of Japan raised its benchmark interest rate on June 16 to the highest in 31 years.

The weak yen threatens to amplify inflationary pressure and erode household spending power. But corporate sentiment has stayed resilient. Exporters benefit from enhanced competitiveness, and suppliers and domestic firms are passing on rising costs to customers through price increases.

Confidence among large manufacturers rose in June to the highest level since 2018. Sentiment at large non-manufacturers was the most optimistic since 1991, the central bank said earlier Wednesday.

Prime Minister Sanae Takaichi has tried to calm consumers by rolling out subsidies to cap fuel costs. But the strategy comes with downsides, including a costly sales tax cut proposal.