Japanese authorities are facing renewed pressure to combat a sustained depreciation in the yen as investors eye prospects of higher-for-longer U.S. interest rates while the Bank of Japan remains wedded to its super low interest rate policy.
Aside from verbal intervention, the government has several options to stem what it considers excessive yen falls. Among them is to intervene directly in the currency market, buying large amounts of yen, usually selling dollars for the Japanese currency.
Below are details on how yen-buying intervention could work, the likelihood of this happening and challenges of such a move: