The yen’s surge beyond a key threshold against the US dollar has sparked speculation among traders in Tokyo that Japan’s $1.6tn government pension fund could engage in “stealth intervention” to soften the currency over coming weeks.
Traders said Monday’s sharp strengthening in the yen past the ￥106 mark against the dollar, alongside further US-China-related volatility in foreign exchange markets, raised the possibility that the Government Pension Investment Fund might discreetly accelerate planned purchases of overseas assets to offset broader yen-buying.
If that happened, said analysts, it could point to a new unofficial intervention lever at a time when “jawbone” tactics may prove too weak and formal action risked heavy diplomatic consequences, particularly from Washington.