Live Updates > Live Update Details
2026-05-19 10:34:19
[Japan Reiterates readiness to intervene in the foreign exchange market, while remaining vigilant about potential impact on US Treasury bonds] 1. Japanese officials stated on Monday that they are prepared to respond to excessive volatility in the foreign exchange market, while pledging to avoid pushing up US Treasury yields during interventions involving buying yen and selling dollars. 2. Japanese Finance Minister Satsuki Katayama stated after the G7 finance ministers' meeting that appropriate measures would be taken if necessary. She pointed out that fluctuations in oil prices are continuing to affect exchange rates and bond yields. 3. Data from the Bank of Japan shows that Tokyo may have already injected nearly 10 trillion yen (approximately US$63 billion) since launching a new round of interventions on April 30. The yen has given back more than half of its gains against the dollar after rising to 155 in early May, approaching the 160 mark—considered a warning line by the market. 4. Rising US Treasury yields have triggered market concerns that Washington may become sensitive to Japan's use of its $1.4 trillion in foreign exchange reserves for intervention. Since the reserves are largely held in US Treasury bonds, theoretically, intervention could involve selling US Treasury bonds. 5. However, Japanese Ministry of Finance officials stated that the foreign exchange reserves maintain ample liquidity, including cash deposits and maturing assets. Selling off US Treasury bonds could push up yields and further strengthen the dollar, having the opposite effect. Authorities will strive to minimize unexpected market impact while ensuring effective action.
