Japan’s forex intervention estimated at 5 trillion yen; the central bank is likely to remain on hold but turn more hawkish, while the Ministry of Finance is ready to take further action at any time

(1) State Street Global Advisors estimates that Japan's intervention in the foreign exchange market this Thursday amounted to approximately 5 trillion yen (equivalent to 31.1 billion US dollars). (2) The institution stated that the Bank of Japan is highly likely to keep interest rates unchanged at today's meeting but will send a hawkish policy signal; it also believes that the window for the next interest rate hike will open in September or October, rather than following the usual six-month interval. (3) Related comments from Besant and the foreign exchange inquiry activities of the New York Federal Reserve provide further justification for Japanese authorities to address excessive yen weakness. State Street emphasized that if USD/JPY once again experiences sharp and disorderly fluctuations, the Ministry of Finance of Japan will not hesitate to implement a new round of intervention measures.