07/05/2026

BIZ & FINANCE THURSDAY | MAY 7, 2026

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Yen jumps abruptly as intervention speculation swirls

TOKYO: The yen surged suddenly yesterday, sparking speculation of further intervention by Tokyo, which is widely credited with last week’s sharp rally in the battered currency. There has been no confirmation from Japan that it is buying the yen but officials have been threatening intervention for months. Sources told Reuters that authorities intervened last week and money market data suggests they sold about US$35 billion. A weak yen is pushing up inflation and living costs in Japan, and officials say the drag on the economy is becoming palpable. But with the currency freely floating, any intervention pits policymakers against traders who have been selling the yen for years, and who soon dialled back its jump yesterday. The yen climbed from around 157.8 to the dollar to 155 in a half hour of holiday-thinned trade in the Asia session. It was last at 156.06 in Europe, leaving the dollar down 1.15% on the day. Large offers were placed for dollar/yen at 156 on the EBS platform, said one trader, who spoke on the condition of anonymity.

“Taking into account high energy prices and Japan running substantially negative real interest rates, plus the dollar being in demand, Tokyo cannot expect a sustained drop in USD/JPY,” said Chris Turner, ING’s global head of markets. “The wild card, however, would be whether the US Treasury gets involved,” he said, which is a possibility after an unusual “rate check” on yen prices by the New York Fed in January. “Joint US-Japanese intervention to sell USD/JPY would be far more significant than solely Japanese intervention. “Here, not only would Washington be backing up Tokyo’s view that the yen has been unfairly targeted, but it could also develop a view that Washington felt that the dollar was too strong.” – Reuters

came as the dollar fell broadly on hopes of a resolution to the US-Iran standoff in the Strait of Hormuz. “It’s possible the authorities decided that was a good moment to give the yen an extra nudge,” said Thomas Mathews, head of markets for Asia-Pacific at Capital Economics. “That said it might be just thin holiday-affected trade.” Analysts expect the intervention impact to be temporary and some investors have eyed drops in the dollar/yen rate as an ideal entry point for shorting the Japanese currency and opening “carry trades” which profit from interest rate differences. Short positions in the yen had hit a nearly two-year high last week and CFTC data due on Friday may show whether that retreated in the wake of jumps in the currency.

o Currency’s weakness is pushing up inflation and living costs in Japan

Japanese Finance Minister Satsuki Katayama had on Monday warned against speculative moves in foreign exchange, after a brief jolt higher in the yen at the start of the week. Investors have been bracing for further yen buying from Japanese authorities after sources told Reuters last week that Tokyo had stepped in to stem the yen’s decline on Thursday. Traders at agent banks have been standing by to get intervention orders throughout Japan’s Golden Week holiday period, one market source told Reuters. Wednesday’s rise in the yen also

The move is at least the fourth sudden unexplained jump in the yen in the past five sessions. The yen is now more than 2.5% higher against the dollar than it was a week ago. “It is obviously an intervention,” said Yuji Saito, an executive adviser at SBI FX Trade in Tokyo. The exchange rate was soon back to 156.4 to the dollar, suggesting that any intervention was being resisted by the market. Japan’s Ministry of Finance was not immediately available for comment on what is a public holiday in Japan.

BMW holds 2026 outlook despite Q1 profit slump

BERLIN: BMW maintained its 2026 financial guidance yesterday and signalled it could weather US tariffs and Chinese competition, sending shares up nearly 5% despite first-quarter pretax profit tumbling 25%. The German premium carmaker beat key profit expectations for the quarter even as a narrowing core margin underscored the pressure on BMW at the start of the year. This convinced investors it was well-positioned for a volatile global auto market, and shares rose 4.6% in early trading. The company reported first-quarter pretax earnings at €2.3 billion (RM10.6 billion), exceeding analyst forecast of €2.2 billion in a company-provided consensus. Group revenue missed expectations, falling 8.1% to €31 billion. The pressures also squeezed rivals Mercedes-Benz and Audi at the start to 2026, as Chinese automakers extended their lead in their home market – the world’s largest – and pushed deeper into Europe, while US tariff threats clouded the outlook further. Despite the profit slide at BMW, analysts pointed to an above-forecast operating margin in the company’s core automotive business. BMW’s EBIT margin in its core automotive business stood at 5% in the first quarter, down from 6.9% a year earlier but ahead of analysts’ forecast of 4.7%. “BMW looks well-prepared to deal with continuing volatility,“ Jeffries analysts said in a note to investors. Like many carmakers, BMW is turning to cost reductions to offset pressures from tariffs and high costs for raw materials in a globally weak automotive market. Unlike Volkswagen and Mercedes, however, it has so far managed to do so without cutting jobs, focusing on factory efficiencies and reduced investment, having rolled out the Neue Klasse platform to overhaul its product portfolio. Tariffs, including US levies but also an EU tariff on EVs made in China affecting BMW’s Mini brand, had a 1.25-percentage-point impact on BMW’s car margin in the first quarter. The company maintained its full-year guidance, forecasting a moderate decline in its group result. – Reuters

A worker pushes a wheelbarrow loaded with oil palm bunches at a plantation in Ijok. – REUTERSPIC

Palm oil rally seen continuing on biodiesel demand boost MUMBAI: Malaysian palm oil prices are likely to rise about 12% to RM5,200 a metric tonne by mid-July, as higher energy prices from the US-Israeli war on Iran boost biodiesel demand and tighten supplies, analyst Dorab Mistry said yesterday. edible oils, Mistry’s forecasts for supply and prices often move markets. Global oil prices hit a four-year high of more than US$126 a barrel last week. This rally has made the use of vegetable oils for biofuel production more attractive. other countries like Malaysia, Thailand and others too.” Indonesia, the world’s biggest palm oil producer, said it would raise the mandatory blending rate for palm-based biodiesel to 50% from 40% on July 1.

Palm oil competes with soyoil, which has rallied in recent weeks as top producers – the US, Brazil and Argentina – increase its use for biofuels. “The US has announced its long-awaited jumbo biodiesel programme for 2026 and 2027, which has, as expected, lit a fuse under soybean oil futures,“ Mistry said. Higher edible oil prices are leading to demand destruction in key consuming countries like India, where stocks have fallen and imports will need to be stepped up from June, he said. – Reuters

Refined fuels like diesel and gasoline rose more sharply than crude after the Iran war began, Mistry said. As a result, the spread between fossil diesel and palm biodiesel narrowed, cutting subsidy requirements and – in some markets – making palm biodiesel cheaper than fossil diesel, he said. “Rising energy prices prompted Indonesia to reinstate its B50 palm biodiesel programme from 1 July 2026,“ Mistry said. “Biodiesel mandates are being increased in

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 1.34% to RM4,647 at the midday break yesterday, though it is up about 15% since the war began in late February. Palm oil futures are expected to extend gains to around RM5,000 by June and potentially reach RM5,200 by mid-July on biodiesel demand, said Mistry, the director of Indian consumer goods company Godrej International. One of the most closely watched analysts of