HSBC Research discusses the latest wave of JPY intervention.

"It is unclear why the US Treasury decided to sell EUR-JPY rather than USD-JPY. There could be greater clarity given by Bessent in the coming days. However, it is possible that the US Treasury wants to limit the downward pressure on the USD, as further currency weakness could lead to higher US Treasury yields . The weekly release of the US’s international reserves (7 August) will tell us how EUR (USD26bn as of 24 July) and JPY assets (USD11.5bn) have changed," HSBC notes.

"Additional rounds of US-Japan FX intervention could occur. It is also possible that other central banks decide to join. The ECB has been quiet so far on the matter, but if it were to intervene as well, this would look like an implicit currency accord to strengthen the JPY. Still, doubts would persist on the sustainability of a JPY recovery when the BoJ is measured at raising rates," HSBC adds.