FIMA lets an approved official account raise dollars against Treasuries instead of selling them. Bessent indicated that it was used in Friday's U.S.-Japan intervention, though the amount remains unknown. The $334.5 billion foreign repo balance covers all official accounts, so it cannot be treated as Japan's cash pile.
The more durable signal came from the BOJ. It lifted its fiscal 2027 median growth forecast to 0.8% and core CPI to 2.4%. It also warned that underlying inflation could move above 2% as wages, expectations and the weak yen pass into prices. The government's pension home-bias push adds a slow yen bid only if it turns into an allocation change.
Japan is trying to manage the speed of the yen. Intervention puts overnight jump risk into the carry trade. BOJ tightening changes the rate path, while FIMA keeps the defense from spilling directly into Treasuries.
The next test comes after official buying fades. A return above 160 would bring the next BOJ hike closer. For Korea, a slow yen recovery can ease regional FX pressure, while a violent carry unwind can hit risk appetite first. Watch USD/JPY and USD/KRW together.
