Japan Likely Spent $13.5 Billion on July 12 Yen Intervention

Japan is believed to have spent approximately $13.5 billion on yen intervention on Friday, according to a Bloomberg analysis of the Bank of Japan's current account data. The intervention, estimated at around ¥2.14 trillion ($13.25 billion), was inferred from a comparison of the central bank's data and money broker forecasts. This follows a similar suspected intervention on Thursday night, where the government is thought to have spent around $22 billion to support the yen amid weaker-than-expected US inflation data.

The Bank of Japan's projections indicated a net receipt of 2.74 trillion yen in the money market, significantly higher than the 600 billion yen estimated by money market brokerages that exclude intervention. This suggests that the Ministry of Finance may have spent around 2.14 trillion yen on Friday alone, in addition to the 3.37-3.57 trillion yen likely spent on Thursday. These actions have resulted in the yen strengthening by 0.9% to 157.38 per dollar following the release of US producer prices data. The interventions appear to be part of a strategic effort to stabilize the yen after it hit 38-year lows.