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 

Currency interventions are only a band-aid for the Japanese yen's decline. Treasury Secretary Bessent and the Bank of Japan spent $90B to halt the slide when USDJPY hit 164, and the move has already recovered nearly half. 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 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

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 yen looks set to keep strengthening against the dollar, because Treasury Secretary Scott Bessent appears determined to push USD/JPY lower. Bessent said in an interview that as "the house" he knows exactly what Japan, the Bank of Japan and its policymakers will do when the US intervenes in the yen, and dared markets to bet against him. As a former fund manager who helped successfully attack the pound and the Thai baht, he holds a real information advantage. x.com 

The yen's intervention-driven rally looks weak and likely to fade, with USD/JPY possibly back near 160 soon. The Fed's EUR/JPY sale came after 4pm on a dead July Friday, signaling weakness speculators will test. Japan is slow-walking supporting policy such as rate hikes or repatriation incentives, and Bessent wants a lower USD/JPY without the US asset drawdown repatriation brings. If USD/JPY fails to regain 160 soon, though, the yen could rally hard, with spec shorts at record extremes. x.com  … Show more

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 

Japan's intervention may mark a turn higher for the yen, but a surge like past appreciation periods is unlikely because there is no yen carry trade to unwind these days. Japan's near 5% of GDP current account surplus is also less structural than it looks: trade is near neutral, and the surplus comes from large investment income that is usually reinvested abroad automatically. x.com  x.com 

The yen will not strengthen meaningfully unless Japanese yields spike far higher, and intervention will not change that over the longer term. USD/JPY will not reach 150 or lower without a very big jump in Japanese yields; only yields going parabolic faster than before would drive it down. The bond market is smarter than the BoJ and Fed combined, even with Japan's 2-year yield above 1.57%, a 30-plus-year high, per Barchart. x.com