Credit Agricole CIB Research discusses the scope of Japan's MoF intervention on Thursday.

"The JPY surged yesterday following the first official FX intervention since 2024 as reported by the Nikkei news agency. The trigger was the push by USD/JPY above 160 that has already led to very strong verbal interventions from Minister of Finance Satsuki Katayama and Vice Minister of Finance for International Affairs Atsushi Mimura. Katayama said the MoF is nearing the time to take bold action in FX. Mimura went further and said it was his final warning before taking action," CACIB notes.

"The MoF could remain on high alert and may exploit the lower liquidity during the Golden Week holiday period and more favourable market positing to intervene again to support the JPY. Pushing the JPY in the opposite direction next week could be the rollout of US labour market and ISM data as well as Japan’s own labour earnings data. Keeping the BoJ hawkish is growing signs higher inflation and a tight labour market are leading to stronger real wages growth. If this were to continue, it would keep Japan’s rates market favouring a BoJ rate hike in June," CACIB adds.