Japan risks Trump’s ire as Iran war fallout sparks currency intervention

the yen surged as much as 0.7% against the dollar on friday, extending a thursday rally where it jumped 3%. by 5:35 a.m. et, it had pared some gains but still erased all losses since the u.s.-iran war began on feb. 28. japan's top forex diplomat atsushi mimura wouldn't comment on specific actions but noted golden week holidays had just started, fueling speculation of further intervention. finance minister satsuki katayama said thursday officials were nearing "decisive action" after the yen hit a one-year low around 160.72. reuters reported, citing anonymous sources, that japanese officials had already stepped in to buy yen on thursday. japan imports over 90% of its crude oil from the middle east, and the strait of hormuz blockade has spiked oil prices. the bank of japan held rates steady on monday but hiked its inflation outlook to 2.8% from 1.9% and halved its 2026 growth forecast to 0.5%. chris iggo at bnp paribas said the boj is "stepping back from its tightening schedule since the war started," worrying bond markets. steve englander at standard chartered said officials likely felt pressure from the u.s. treasury, which added japan to its monitoring list last year. "enough is enough," he said, as the weak yen worsens the pricing picture.