Thursday's yen-buying and dollar-selling intervention set the Japanese currency for its biggest weekly rise since February and a monthly jump of more than 1.5%. The move has pulled it away from four-decade lows but failed to give it a sustained boost.
"Previous interventions have provided temporary relief, but the yen has often resumed its decline once the immediate support faded," said Harun Thilak, head of trading for North America at Validus Risk Management.
"This highlights the limits of direct intervention when broader macroeconomic and interest-rate fundamentals remain unfavourable."
The BOJ, which hiked rates to a 31-year high last month, warned for the first time that underlying inflation could exceed its target, signalling further rate hikes from as soon as September.
BOJ Governor Kazuo Ueda said many of the board members' inflation forecasts are fairly high and they see risks skewed to the upside.
Japan's slow pace of rate hikes has been blamed for pushing the yen to 40-year lows below 163 per dollar recently, and most analysts polled by Reuters expect the BOJ to raise rates again to 1.25% by year-end.
Tokyo was also receiving support from the U.S. that "goes beyond psychological support", Japan's top foreign exchange diplomat said on Friday.
Thursday's moves resulted in spot yen trading volumes surging to their highest in 10 years on the EBS trading platform and futures trading volumes hitting highest on record, the CME Group said.
In a rare coordinated move, South Korea also conducted dollar-selling intervention on Thursday to support its currency, a market source told Reuters.
The won rose to a nine-month high KRW= before paring some gains, last down 1.36% to stand around 1442.49 against the dollar.
TLT•
