The yen remains under pressure, and the Bank of Japan's record interventions look increasingly hard to sustain. Japan's foreign exchange reserves fell by $77 billion after record interventions in May. The BOJ wants demand-driven inflation from rising wages and consumption, but a sliding yen risks supply-side inflation instead, leaving it between a rock and a hard place. x.com  x.com 

The yen stays weak because intervention cannot fix Japan's deeply negative real rates and a sluggish central bank. Japan deployed up to $95.6 billion over two days, and joint intervention with the US Treasury briefly lifted the yen about 2.8%, but about 85% of that rally has evaporated, with USD/JPY back near 159. The yen has lost 30.6% against the dollar in five years. Intervention did warn speculators off the 160-164 zone, and yen net shorts fell $8.865 billion in a week, the most since 2014. … Show more

Shorting the yen against the dollar makes little sense given Japan's stronger fiscal and external position. Japan's primary deficit is a fraction of the US's, it is cutting energy imports through renewables, holds massive external assets and shows budget wariness, such as refusing Asian Games spending. Meanwhile Trump promises $5,000 per voter for the midterms. Shorting the yen against commodities such as silver is understandable; against the dollar, not. x.com  x.com  x.com 

The yen looks set to weaken further, with dollar-yen creeping beyond the 160 level, as the Fed turns more hawkish. The Fed removed its statement reference to additional rate adjustments, nine of 18 FOMC participants pencil in a 2026 rate hike, and the SOFR curve is ripping higher. x.com 

The yen remains weak, with the dollar already back above 160 yen, and if the Fed hikes, Treasury Secretary Scott Bessent will have to buy Japanese government bonds along with the yen. Bessent has said a disorderly yen could ultimately raise US rates. x.com 

Going long the Japanese yen is the best trade on earth right now, because US Treasury Secretary Scott Bessent will step in to save it, with swap lines and similar measures. The yen's slide has become severe enough that Japan needs to raise rates. x.com  x.com 

Japan's yen interventions only buy time, so the yen is likely to keep weakening until the Bank of Japan actually moves. Reserves only help while rates stay pinned, and each round costs reserves Japan can't replace while buying less time, making intervention a speed bump for the carry trade. Japan did not save USD/JPY 160 but rented time at it; once 162 prints, the intervention narrative dies. x.com  x.com  x.com  x.com 

The Japanese yen is weakening again despite the coordinated Bank of Japan and US Treasury intervention, having given back about 38% of the manufactured gain. More government intervention looks likely soon as the currency slides. x.com  x.com 

The yen is strengthening sharply toward ¥153-154 as the Bank of Japan hikes rates and intervenes, starting to unwind the global carry trade funded by cheap yen. That is not a normal FX move but a systemic margin call on every leveraged position funded in yen, with the BOJ now playing its own game rather than following the Fed. x.com 

The yen keeps weakening despite repeated intervention, with dollar-yen back at 156. The US has no choice but to fund as many rescues of the yen as the BoJ wants, since otherwise Japan would be forced to sell its US Treasuries. The BoJ meets on the 18th, and it is unclear what it can even say. x.com  x.com