Japan's Strategy Provides Temporary Relief for Yen Amid Economic Uncertainty

Japan has successfully secured a temporary respite for the yen without any evidence of large-scale intervention, according to foreign media analysis. This suggests that Japan's strategy of leveraging fears of joint intervention with the U.S. has been effective in the short term. According to Jin10, just a week ago, Japanese policymakers faced challenges with rising bond yields, stock market risks, and the Bank of Japan's unclear stance on interest rate hikes. Within days, the USD/JPY exchange rate fell from above 160 to around 153, driven by concerns over potential coordinated actions between Japan and the U.S., aided by timely execution. U.S. President Donald Trump's mild stance on the dollar's depreciation has sparked speculation about a long-term downward trend for the dollar, impacting not only the yen but also various other currencies. However, whether this trend will persist remains uncertain, making Japan's recent success fragile. If the USD/JPY moves back towards 160, Japan may need to implement more substantial measures to replicate its success.