JPM | APAC THEMATICS - JPY: MoF intervention not a game changer long term (& a repeat of Jul/Aug 2024 = highly unlikely), but near term short squeeze is likely from extreme starting positioning.

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JPM | APAC THEMATICS - JPY: MoF intervention not a game changer long term (& a repeat of Jul/Aug 2024 = highly unlikely), but near term short squeeze is likely from extreme starting positioning.

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APAC Specialist Sales J P M O R G A N

03 August 2026

JPM | APAC THEMATICS - JPY: MoF intervention not a game

changer long term (& a repeat of Jul/Aug 2024 = highly unlikely),

but near term short squeeze is likely from extreme starting

positioning.

Matthew See

+852 2800 8889

matthew.see@jpmorgan.com

APAC Thematics focuses on key macro views, market debates, and favoured investment themes.

Coordinated FX intervention… a surprise. Headlines of coordinated Japan MoF and US Treasury JPY intervention has

triggered the yen to rally 1% today - and it’s now up 4% from the June low. This is the first coordinated intervention in

nearly 30 years - and follows a more interventionist stance by the MoF (solo) over the past 5 years.

JPM FX strategy view… NOT a mid-term JPY game-changer. The long-term impact of intervention flows on S/D for the

JPY is unlikely to be large. JPM’s Junya Tanase believes neither Japan nor the US have a strong intention to push the yen

sharply lower - with the Takaichi Govt still prioritising growth over all else. This is about putting a floor on JPY - not trying

to appreciate it.

In the near-term… the covering of speculative JPY shorts is likely. Latest non-commercial short futures positions are

historically elevated, and broadly inline with levels seen in 2024. This is indicative of elevated short positioning more

broadly which, combined with the JPY being 20% undervalued on a REER basis, makes near-term short covering likely.

But a repeat of July/Aug 2024… is highly unlikely. MoF intervention in mid-24 saw the JPY +13% over 2-months and the