Japan threatens to intervene again to stop the yen's decline

On Thursday, Japan warned currency market traders not to ignore the possibility of authorities intervening again to support the yen, after the Japanese currency approached the level of 160 yen to the dollar, in light of the strength of the US currency and rising expectations that the Federal Reserve (US central bank) will raise interest rates next December.

Atsushi Mimura, chief foreign exchange policy official at the Japanese Ministry of Finance, said that recent currency movements have been excessively rapid, stressing that it is still too early to forget last summer's interventions. Mimura added, in his first statements regarding the exchange market since late last September: “It is still too early to forget what happened this summer,” referring to the yen purchases carried out by the Japanese authorities between late July and early August, which included a joint intervention with the United States.

The warning came after the dollar rose to 159.94 yen in early trading on Thursday, recording its highest levels in more than two months, approaching the psychological barrier of 160 yen again. This level reflects the mounting pressure on the Japanese currency, with the widening gap between the expectations of the US and Japanese monetary policies, at a time when investors are betting on the continued rise in US interest rates.

US inflation strengthens the dollar

The dollar benefited from US inflation data that came higher than expectations, along with hawkish statements from Federal Reserve officials, which strengthened the odds of raising interest rates next month. These expectations support the attractiveness of dollar-denominated assets, compared to Japanese assets. Which increases pressure on the yen, especially with the continued gradual tightening of monetary policy at the Bank of Japan.

Tokyo faces an escalating dilemma. A weak yen leads to higher costs of imports, especially energy and raw materials. Which is reflected in the prices of goods and services and puts pressure on the purchasing power of families.

Data released Thursday showed that the import price index, denominated in yen, rose by 24.8 percent during last October, compared to the same month last year. This jump indicates that the decline of the currency is no longer just a development in the exchange markets, but rather has become a factor influencing local inflation and production costs.

The level of 160 yen is under observation

Analysts believe that the dollar's approach to the level of 160 yen increases the possibility of action by the Japanese authorities, especially if the currency continues to decline at a rapid pace and leads to more inflationary pressures. Mizuho Securities analysts said in a report that the dollar is likely to continue rising against the yen, supported by the strength of the US economy and the continuation of relatively high inflation, in light of the strength of investments related to artificial intelligence.

They added that the dollar exceeding the level of 160 yen, and the accompanying rise in Japanese inflation, could increase political pressure on the government of Prime Minister Sanae Takaichi, and push Tokyo to implement a unilateral intervention in the currency market.

Mimura's statements are of particular importance. Because it links the current warning to an actual intervention over the summer, reminding investors that the authorities are prepared to use their foreign currency reserves to limit unwanted movements. However, approaching a certain level does not mean that intervention has become inevitable; Japanese authorities usually focus on the speed and intensity of currency movements, and not on a specific exchange rate alone.

A test of Japanese monetary policy

These developments come as the Bank of Japan discusses the pace of raising interest rates, amid disagreement within its board of directors regarding the economy’s ability to withstand further tightening. This discrepancy increases the complexity of the authorities’ task. Because raising interest rates may help support the yen, but it may also put pressure on consumption and economic growth. Conversely, continued currency weakness threatens to keep import prices high; This makes achieving price stability more difficult.

The Finance Ministry's warnings indicate that the government is seeking to deter speculation and slow the yen's decline, even before deciding to intervene directly.

Between the strength of the US dollar and the Bank of Japan’s warning against accelerating interest hikes, the Japanese currency remains vulnerable to fluctuations during the coming period. Investors will await whether the dollar will exceed the 160 yen barrier, and whether the Japanese authorities will be content with verbal warnings, or will return to actual intervention to protect the currency and reduce inflationary pressures.

The Future Investment Initiative Foundation announced, on Thursday, the new date for the tenth edition of the initiative, which will be hosted by Riyadh during the period from 25 to 28 October 2027, after it was scheduled to be held from 26 to 29 October 2026.

The tenth edition is held under the patronage of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, under the slogan “The Power of Legacy,” to celebrate the decade since the launch of the initiative and the investment dialogues and international partnerships it has witnessed, and to anticipate the trends that will shape the next decade.

The CEO of the Future Investment Initiative Foundation, Princess Maha bint Mishari bin Abdulaziz Al Saud, said that moving the date of the tenth edition to October 2027 comes in order to ensure the highest levels of international participation, attendance and impact, stressing that this edition represents a prominent milestone in the initiative’s journey, which has brought together over a decade world leaders, investors and decision-makers.

She added that the Foundation looks forward to welcoming the global initiative community in Riyadh as part of an exceptional edition that celebrates the tenth anniversary of its launch, expressing its thanks to the Saudi leadership for its continued support.

As part of its preparations for the tenth edition, the Foundation continues to organize its international events, as Miami will host the “Priority Future Investment Initiative” summit during the period from March 31 to April 2, 2027, while the Foundation intends to organize the “Priority Future Investment Initiative in Asia” summit during the same year, with its date and location to be announced later.

The Future Investment Initiative Foundation is a global non-profit organization with an investment arm, and focuses on supporting initiatives and solutions that aim to achieve a positive impact on humanity, through the axes of thinking, communication and action, with an interest in the sectors of artificial intelligence, robotics, sustainability, healthcare and education.

Nasdaq 100 futures topped Wall Street's losses in Thursday's trading, after Nvidia shares tumbled on the back of reports that the company's board of directors was considering dismissing its CEO, Jensen Huang. Which sparked turmoil in shares of companies related to artificial intelligence.

“Nvidia” shares declined; One of the most influential companies in the artificial intelligence sector, by about 7 percent during pre-market trading, following reports of two extramarital affairs allegedly linked to its veteran CEO, according to Reuters.

The pivotal role played by NVIDIA in the artificial intelligence boom has linked a large part of the sector’s prospects to the company’s performance. This made investors more cautious about the potential repercussions of any change in its leadership.

“The controversy presents an unusually difficult problem for investors, who have spent years focusing their investments on companies seen as key to the AI ​​economy,” said Terry Lee Bennett, chief operating officer at CMS Prime.

By 04:11 a.m. EDT, Dow Jones Industrial Average futures were up 20 points, or 0.04 percent, while S&P 500 futures were down 29.25 points, or 0.38 percent, and Nasdaq 100 futures were down 226.25 points, or 0.79 percent.

The losses extended to chip manufacturing companies; Intel, Marvell Technology, and Micron shares declined by rates ranging between 2.6 and 3.4 percent. Shares of artificial intelligence infrastructure companies CoreWave and Nebios also fell by 7.2 and 4.7 percent, respectively.

These declines threatened to erase the gains stocks achieved on Wednesday, when strong results from Core Wave helped artificial intelligence stocks regain some balance. Among the group of 7 major companies, Tesla shares fell by 0.8 percent, while Alphabet shares rose by 0.5 percent.

The sharp fluctuations reflect the state of tension in investment markets related to artificial intelligence. Concerns about a slowdown in data center development have increased following gains made by Democrats in the midterm elections, while some investors see the recent declines as a buying opportunity.

Tom Holick, CEO of Strategic Asset Managers, said that conditions are still favorable for artificial intelligence companies, adding that individual investors and algorithmic trading may contribute to the transmission of volatility between stocks, but the company does not see signs of a slowdown in capital spending on artificial intelligence.

He added that the correction witnessed by the Nasdaq index may constitute an opportunity to enter into some stocks, away from their exaggerated levels of valuation.