Japan’s foreign currency reserves at the end of April were largely unchanged from the previous month, likely an indication that currency intervention came too close to the end of the month to be reflected in the data.
The Federal Reserve’s custody holdings of Treasuries fell for the first time in a month at a time Japan was likely intervening to support its currency, with markets debating whether the nation offloaded US securities to fund its yen purchases.
The yen’s failure to breach 155 to the dollar after repeated cases of suspected intervention by Japan is raising questions over the durability of the currency’s recent advance.
South Korea’s largest pension fund removed its cap on currency hedging last month, allowing it to exercise more heft in the foreign exchange market at a time of won weakness.
Japanese Finance Minister Satsuki Katayama declined to comment if authorities intervened to support the yen last week, after reports said they had entered the market for the first time since 2024.
The correlation between dollar-yen and Brent crude rose to its highest level since late 2021 a day before Japanese authorities intervened in the currency market, underscoring the tighter link between oil prices and the yen.
