The yen hit 161.80 against the dollar on Thursday. Weakest since July 2024. Markets now wait to see if Japan's Ministry of Finance will light another $50 billion on fire trying to defend a number that nobody under the age of 60 remembers.
Intervention bets are back. Because the last three times worked so well. Japan spent roughly $60 billion in 2024 propping up the yen and got about six weeks of relief before the market remembered that interest rate differentials exist. But sure. Try again. Fourth time's the charm.
Retail traders are currently Googling "what is intervention" and buying yen pairs because they think the Ministry of Finance is going to hand them free money. They will be correct for approximately 90 minutes before the dollar resumes its march and they're back on Reddit asking if they should average down.
The headline calls this a 40-year low. Technically it's approaching one. The yen hasn't been this weak since 1986 when it actually hit 160. But why let four decades of context interfere with a good panic. Someone in Tokyo is definitely awake right now staring at a Bloomberg terminal wondering if they should call their boss or just let the thing ride until morning.
The best part is that everyone knows intervention doesn't work. It's monetary theater. A expensive press release that says "we are concerned" in the least convincing way possible. The yen will strengthen when the Fed cuts rates or Japan raises them. Until then it's just a very expensive way for bureaucrats to pretend they control anything.
Somewhere a 19-year-old with a Robinhood account just shorted USD/JPY at 161.95 because TikTok told him central banks always win.
Photo by Ystallonne Alves on Unsplash
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