USD/JPY Slides, Markets Suspect Fresh Japanese Intervention
The dollar-yen pair came under renewed pressure on Wednesday, fueling market speculation that Japanese authorities may have stepped in once again to support the yen. The move comes as geopolitical tensions between the United States and Iran show tentative signs of easing.
USD/JPY dropped 2% to touch a low of 155.03 before partially recovering to around 156.20 on Wednesday (May 6). The price action closely mirrors last week's episode, when traders similarly suspected intervention in the foreign exchange market.
Japan's Finance Minister, Satsuki Katayama, reiterated the government's stance against excessive and speculative currency moves. Speaking after attending the annual meeting of the Asian Development Bank in Uzbekistan yesterday, she said authorities stand ready to take decisive action in line with agreements reached with the United States last year.
Despite increasing market suspicion, the Japanese Ministry of Finance has yet to comment on either last week's or today's alleged intervention. Notably, Japanese markets are currently closed for the Golden Week holiday through May 6, 2026.
Intervention by Japanese authorities is usually carried out by selling US dollars and buying yen, which then puts pressure on the USD/JPY pair. The impact often extends beyond the currency pair, with broader reverberations across global markets. The US Dollar Index (DXY), for instance, weakened to as low as 97.89.
In addition to intervention concerns, the dollar has also come under pressure from waning safe-haven demand. Donald Trump signaled a potential delay in naval escort operations in the Strait of Hormuz, citing progress toward a broader agreement with Iran. The remarks helped improve market sentiment following earlier concerns over escalating maritime tensions.