Japan confirms $96 billion intervention to support falling yen

Japan's Ministry of Finance and the Bank of Japan confirmed Wednesday that authorities conducted yen-buying interventions worth roughly $96 billion during the two-month period, marking a significant effort to shore up the weakening currency. The operations represent one of the largest such interventions in recent years as the yen faced sustained downward pressure in foreign exchange markets.

The yen had come under considerable strain due to widening interest rate differentials between Japan and the United States, with the Federal Reserve maintaining higher rates while the Bank of Japan kept its policy rates low. This disparity made dollar-denominated assets more attractive to investors, driving demand away from the Japanese currency.

Official interventions in currency markets are typically coordinated between the Finance Ministry and the central bank and are deployed when authorities judge that exchange rate movements have become disorderly or threaten economic stability. Japan last conducted significant yen-buying operations in 1998 and 2011, making the recent intervention particularly notable in scale and scope.

The acknowledgment comes as Japan continues grappling with economic challenges including persistent inflation and the need to support domestic exporters facing currency headwinds. Authorities have signaled readiness to conduct further interventions if market conditions warrant such action in the coming months.