Japanese authorities appear to have already committed significant sums to buy the yen in recent weeks, according to an analysis by Citi. The bank estimates roughly 10 trillion yen - about $63 billion at prevailing rates - has been deployed to support the currency, and it sees scope for that figure to rise substantially.
Data on Bank of Japan current deposits point to targeted intervention activity. Citi interprets the figures as indicating approximately 5 trillion yen of yen purchases on April 30, followed by another 5 trillion yen during the period from May 1 through May 6.
Those amounts place the recent operations in the context of earlier interventions. Official data show yen-buying totaled 9.1 trillion yen, equivalent to about $65.2 billion, in 2022, and 15.2 trillion yen, roughly $98.5 billion, in 2024. In each instance, Tokyo acted after the dollar-yen pair traded through the 160-per-dollar threshold.
Following the most recent round of intervention, the USD/JPY rate moved as low as 155 yen intra-session but had recovered to the neighborhood of 158 yen by this week. Citi says there remains a possibility that intervention could match or exceed previous magnitudes if conditions warranted further support.
The bank added a conditional observation on importer behavior: should intervention be sufficient to push USD/JPY below 155 yen, latent demand from Japanese importers - including small and medium-sized enterprises - to buy dollars would likely be extinguished. That latent demand has been one component of dollar demand in Japan.
At the same time, Citi cautioned that other market forces could continue to weigh on the yen. Elevated crude oil prices and strong equity markets are cited as factors that are negative for the currency, and the bank warned that the dollar-yen rate could rebound quickly once intervention ended.
Despite those headwinds, Citi notes some improvement in overall yen supply and demand dynamics. The bank observes that momentum behind moves above the 158-to-160 per dollar zone appears to be waning.
On the question of how much ammunition remains, Citi pointed to Japan's foreign currency reserves, which exceed $1.3 trillion. Between 2022 and 2024 those reserves fell from about $1.4 trillion to roughly $1.2 trillion, a decline that Citi says was larger than the approximately $160 billion used for intervention over that period. The bank attributes the reduction primarily to rising U.S. interest rates and declines in bond prices.
Citi notes that conditions in the U.S. bond market are now more stable. It argues that if Japan's finance officials were prepared to accept a reserve drawdown similar to that seen between 2022 and 2024, authorities could in theory purchase around 30 trillion yen - indicating that the recent two-week intervention may not represent the full extent of possible action.
Contextual note: The information above reflects Citi's estimates and interpretations of central bank deposit flows and reserve levels. It outlines potential capacity based on reserve balances and past reserve drawdowns, without asserting any definitive policy commitments by Japanese authorities.