It would have made no sense for Japan's central bank and the Ministry of Finance to team up to defend the Yen at 155 or 160 or 165. The speculators are not yet overconfident enough.
From June 2022's "An Analysis of The Wartime Actions Of Governor Elvira Nabiullina and The Russian Central Bank":
....The key to any currency operation by a central bank is the art of patience. You can't go burning through your FX reserves attempting to support your fiat. See any number of examples with Soros v. Bank of England being the first that comes to mind. You have to wait for that inflection point where the speculative raid is running out of momentum and then go huge, sweeping any offers and coming back and saying "What else ya got?"
This is apparently what Nabiullina did, minus the American colloquialism, of course.
Let those betting against your currency believe they are invincible, borrowing against their positions to the utmost and then, crush them, leveraging their own hubris against them.
Or something.
From Asia Times, July 24:
Officials warn of ‘decisive action’ to boost the yen but quietly favor the weakness that makes exports more competitive with China
Japanese Prime Minister Sanae Takaichi’s political fortunes are falling almost as fast as the yen these days — and the two are closely linked.
The yen has slid toward 164 against the dollar, its weakest level since 1986, driven partly by the same economic strains dragging down Takaichi’s approval ratings. A new Mainichi Shimbun poll shows her Cabinet’s support dropping 10 points to 41% in mid-July, slipping below 50% for the first time.
But the yen’s decline is troubling for three reasons that global markets have largely overlooked. First, it exposes how bereft the ruling Liberal Democratic Party is of fresh strategies for keeping pace with a faster-growing China.
A weak yen has been the LDP’s default growth lever for 25 years. And Takaichi’s slipping popularity is only compounding the problem as she pours political capital into an unpopular Imperial House Law that changes the rules governing both marriage and adoption within Japan’s royal family, rather than focusing on economic concerns.
Second, there’s a strange silence from Washington as the yen plumbs new modern lows. Given the scale of the current trade war — Trump has just layered new 10%-12.5% tariffs onto most major trading partners — you’d expect sharp criticism of Japan for manipulating its exchange rate. Instead, Treasury Secretary Scott Bessent’s department has said almost nothing about the yen.
Third, the yen no longer seems to attract the safe-haven demand it once did during global turmoil. That could reflect broader dollar strength rather than yen weakness — gold isn’t rallying either — but it may also confirm a fear long held in Tokyo: that global capital is simply routing around Japan.
For now, Tokyo’s priority is propping up a slowing economy. Japan is projected to grow just 0.5% in 2026 — far below the inflation trajectory the Bank of Japan has been signaling much of the year.
Since the BOJ raised rates to a 31-year high of 1% in mid-June, the Iran war has reemerged as a major risk, threatening to push oil-importing Japan into stagflation — a scenario that could prove even harder to manage than the deflation of past decades.
Despite public statements and periodic intervention, the reality is that Takaichi’s government still wants a weaker yen — not necessarily a plunge to 170, but a retreat to the 140-150 range would increase pressure on Japan’s US$4.2 trillion economy.
China’s shadow looms large here. Beijing has spent the past two years exporting industrial overcapacity worldwide, intensifying price competition that President Xi Jinping’s government has struggled to rein in....
....MUCH MORE
