Yen traders face a heightened risk of intervention over the next two weeks after Japan’s currency defied historic attempts to prop it up.
The currency underperformed all its Group-of-10 peers in May despite record spending by Japan. That puts it in danger of weakening to 160 against the dollar well before any support comes from the Bank of Japan in the form of an expected interest hike on June 16.
“Intervention is buying time, not turning the tide — the real pivot has to come from the BOJ,” said Masahiko Loo, a senior fixed income strategist at State Street Investment Management.