Yen leaps, Japanese stocks and bonds drop as Tokyo confirms joint intervention with US

U.S. Treasury Secretary Scott Bessent said Washington "will not hesitate to participate in further joint intervention," while repeating calls for further interest rate hikes from Japan's central bank. The BOJ kept its policy rate steady on Friday, but warned for the first time that underlying inflation could exceed its target and said future policy discussions would focus on upside price risks. "Bessent's comments arguably carry more weight than the intervention itself," said Matt Simpson, senior market analyst at StoneX. "It feels like a safe bet that the Japanese yen has troughed for the year." TOKYO, Aug. 3 (Reuters) - The yen leapt on Monday, while Japanese stocks and bonds fell after Tokyo confirmed a rare joint intervention with Washington to pull the Japanese currency off four-decade lows. The yen JPY= jumped as much as 1.4% to 155.20 per U.S. dollar, a level last seen on May 6. The sudden surge raised speculation among market participants of another round of intervention, following the joint action last week, when the yen surged 3.8% over Thursday and Friday. Japanese Finance Minister Satsuki Katayama declined to comment on whether her ministry had intervened on Monday. "The coordinated intervention has materially raised the cost of betting against the yen," said Charu Chanana, chief investment strategist at Saxo. "It not only caught speculative positioning offside but also increased the risk of follow-up action, which should make investors more cautious about rebuilding aggressive short-yen positions." Japanese government bonds declined, sending yields higher as some investors took joint intervention as a signal for an accelerated pace of Bank of Japan policy tightening. The yield on Japan's 2-year government bond JP2YTN=JBTC, the tenor most sensitive to monetary policy expectations, rose 5.5 basis points to 1.56%, a three-decade high. The 5-year JGB yield JP5YTN=JBTC climbed as much as 6.5 basis points to a record-high 2.09%. The 10-year yield JP10YTN=JBTC climbed as much as 3.5 basis points to 2.83%. "Japan and the U.S. conducted joint currency intervention, which means Japan is under pressure to support the yen with fundamentals this time, such as with monetary policy," said Rinto Maruyama, senior strategist of FX and rates at SMBC Nikko Securities. Japan's currency has been under pressure for years, undermined by the BOJ's gradual approach to monetary policy tightening, which has kept yield differentials wide between Japan and the rest of the world. The yen changed hands at 156.82 per dollar as of 0648 GMT, up around 0.4% on the day. The sudden gain in the yen weighed on Japanese stocks. The Nikkei .N225 retreated sharply from Friday's one-week high, sliding as much as 2.6%, while the Topix .TOPX tumbled 3.1%. A stronger yen slashes the value of overseas revenue for domestic exporters. Losses had narrowed by the close, though, with the Nikkei ending down about 1% at 63,754.90 and the Topix shedding 1.1% to 3,960.03. Automakers were among the worst performers, with Toyota 7203.T slumping 3.4% and Suzuki 7269.T sliding 6.7%.

Yen leaps, Japanese stocks and bonds drop as Tokyo confirms joint intervention with US

Bessent signals more intervention is possible

Yen jumps as Tokyo confirms joint intervention

Bond yields rise on expectations of faster BOJ tightening

Japanese stocks retreat as a stronger yen weighs on exporters

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