Holiday "3 consecutive days" intervention to boost the yen, Japan says "counts as only 1 time," IMF stipulates "maximum 3 interventions within 6 months"

Holiday "3 consecutive days" intervention to boost the yen, Japan says "counts as only 1 time," IMF stipulates "maximum 3 interventions within 6 months"

Japan intervened in the foreign exchange market for three consecutive days during Golden Week, but Japanese officials immediately cited IMF rules, claiming these three actions "count as one"—behind this statement is Japan's careful calculation regarding the number of interventions.

A Japanese Ministry of Finance official told reporters on May 5 that under IMF regulations, interventions in the foreign exchange market over three consecutive working days are considered "a single action." The official made this statement while attending an international conference in Samarkand, Uzbekistan, along with Finance Minister Satsuki Katayama.

Based on this, the interventions on April 30, May 2 (Friday), and May 4 (Monday) are combined as one. The official added that even if Japan is in a public holiday, as long as global markets are open, the interventions are counted; thus, May 4 is recognized as the last day of three consecutive working days starting from April 30.

Why the "Number of Interventions" Is So Critical

This isn't a technical detail, but concerns the international credibility of Japan's exchange rate policy.

IMF rules stipulate that such interventions can occur a maximum of three times in six months to maintain a "free floating exchange rate" designation. If exceeded, the IMF will reclassify Japan's exchange rate regime as "floating exchange rate"—this distinction matters in the international monetary system and directly affects Japan's policy space within the G7 framework.

In other words, by invoking the "three days count as one" rule, Japan is reserving quota for possible future interventions.

Three Interventions, Their Effectiveness Diminishing

This round of intervention began on April 30, triggered when USD/JPY surpassed 160.72. According to Bloomberg analysis, authorities deployed about $34.5 billion that day to support the yen, with the exchange rate rebounding to around 155.

However, the effectiveness of the next two interventions was clearly lessened—the yen briefly strengthened after each intervention, then quickly fell again. Reports say the latter two interventions cost roughly $20 billion in total. Altogether, this round of intervention is estimated to exceed $54 billion.

On Monday, Satsuki Katayama reiterated that the government is "ready at any time to take decisive action against speculative exchange rate fluctuations," using language consistent with the agreement reached last year between Japan and the United States.

Nomura: Whether the Intervention's Effects Persist Depends on Three Conditions

The market’s main concern: how long can this round of intervention hold?

Nomura Securities macro strategist Naka Matsuzawa stated in a weekly report released May 1 that the intervention itself is not the focus—the "endgame" is. He pointed out that unless three conditions are met simultaneously, the effect will not last:

First, US understanding and cooperation. Matsuzawa judged that such a high-profile intervention would have been impossible without US Treasury prior knowledge. US Treasury Secretary Scott Bessent is scheduled to visit Japan mid-May; he has long felt Japan’s central bank is "behind the curve" and warns that excessive volatility in Japan’s government bond market may impact global financial markets.

Second, the Bank of Japan must pave the way for a rate hike in June. If the BOJ moves slower than expected, depreciation pressure on the yen will continue to accumulate.

Third, Sanae Takaichi herself must be willing to adjust policy direction. This, Matsuzawa believes, is the most uncertain and most crucial element—whether Takaichi will prioritize curbing yen depreciation in policy, and support the BOJ in moving rates toward a neutral level.

Matsuzawa candidly said, "Japan doesn’t seem to have taken even the first step yet."

"Buying Time" or a Real Shift

Matsuzawa posed a deeper question: Is Sanae Takaichi aiming to genuinely correct the excessive depreciation of the yen, or just waiting for Middle East tensions to ease and energy trade to normalize?

He noted that if the answer is the latter, with no solution to the Hormuz Strait blockade and expectations of US rate cuts fading, the risk of a "sell Japan" trade returning before June will rise significantly.

Nomura has raised its entry range for shorting USD/JPY to 157–162, with a target of 145 and a stop loss at 166; currently waiting to enter the market.

Matsuzawa’s stance for that week is cautious: weak equities, flat bonds, strong USD, flat JPY. He also noted that unless USD/JPY breaks above 160 again, there will be no further intervention.

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