Quick overview

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The Japanese yen trimmed some of its gains against the U.S. dollar on Friday, but it remained on track for its strongest weekly advance in more than two months after authorities stepped into currency markets to support the battered currency.

Japanese officials intervened on Thursday after the yen plunged to its weakest level against the dollar since July 2024, fueling speculation that the government is determined to slow the pace of depreciation and stabilize financial markets.

Investors remain on high alert for additional action from Japan’s Ministry of Finance (MoF), especially as reduced trading activity tied to the May 1 holiday and the upcoming Golden Week period could amplify currency volatility. One Japanese official hinted that further interventions remain possible in the coming days.

“The challenge is that they are fighting against underlying fundamentals,” analysts noted. “The weak yen likely reflects broader economic conditions, making it difficult for the MoF to sustainably push against market forces.”

How the Yen Is Trading

The yen weakened 0.39% to 157.21 per dollar on Friday. However, Thursday’s sharp rebound left the Japanese currency on track for a weekly gain of 1.35%, its strongest performance since mid-February.

Meanwhile, the U.S. dollar index — which tracks the greenback against a basket of major currencies — rose 0.05% to 98.20. The euro slipped 0.04% to $1.1725.

Japan’s top currency official, Atsushi Mimura, said Friday that excessive market moves remain a concern, reinforcing expectations that authorities could intervene again to strengthen the yen during the holiday period.

Ministry of Finance of Japan and the Bank of Japan have increasingly come under pressure to defend the currency as rising U.S.-Japan interest rate differentials continue to weigh heavily on the yen.