Yen Soars

USDJPY is stabilising today following a sharp sell off yesterday in response to suspected intervention from Japanese authorities. Speaking earlier in the day, ahead of the plunge, Japanese Fin Min Katayama warned that the time to take ‘decisive’ action was fast approaching. Following those comments, USDJPY dropped by more than 3% with traders widely suspecting intervention. Indeed, Reuters then ran a report following the move citing sources close to the BOJ saying that officials had intervened. The move marks two years since the BOJ’s intervention around the same time in 2024. Last time around, the BOJ followed up with a second round of USD selling two days later, meaning traders should brace for the possibility of a second move next week.

Bullish USD Risks

Despite the intervention, USDJPY found decent demand into yesterday’s lows, bouncing of the bull channel lows. With the pair remaining stable today, risks of further BOJ intervention are seen, particularly if prices start to drift higher again. USD has been impacted lower by the move for now. Looking ahead today, traders will be watching incoming US ISM data as well as a TV appearance from Fed’s Miran. More broadly, traders will be eyeing any developments in the US/Iran peace process. With tensions elevated again after Trump rejected Iran’s latest proposal, USD could start o move higher again via increased safe-haven demand.

Technical Views

USDJPY

The sell off has seen price breaking back down below the 157.85 level though the move has staled for now into a test of the bull channel lows, with 154.65 support just below. While this area holds, focus is on a recovery higher with 161.95 the next bull target. If we break lower, 151.15 will be the next support to watch.