Societe Generale Research discusses the latest wave of yen intervention

"We still think that what will trigger a durable yen rally will be a rise in consensus forecasts of Japanese growth, rather than more, bigger intervention, coordinated or otherwise. More, or faster BoJ rate hikes won't solve the problem either, unless the Japanese growth outlook makes them appear realistic. Both the Japanese and Eurozone economies are expected to grow by around 0.6% this year, but the consensus economist thinks the gap will widen again in the Eurozone's favour next year. Japan has a much higher debt/GDP burden than the eurozone, and both real and nominal yield differentials are much narrower than they used to be," Socgen notes.

"This means that if Japanese growth remains weak, higher JGB yields will increasingly be unhelpful for the yen. The good news is that the sooner the war in the Gulf draws to an end, the sooner the Japanese growth outlook can recover and the easier it will be for Scott Bessent and Satsuki Katayama to engineer a longer- term change in the yen's prospects. In the meantime, a drift back up in USD/JPY seems a significant risk, bringing with it an increased risk of another round of FX intervention," SocGen adds.