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Japanese yen stays near 40-year lows, with intervention risk in focus

Strategists warn that stretched positioning in USD/JPY leaves the pair vulnerable to a sharp reversal if Japan intervenes.

Reported · Written up by our desk · Major Pairs

The Japanese yen was held near 40-year lows against the US dollar, with traders focused on the risk that Japan could intervene to slow yen weakness, FXStreet reported. FX strategists at ABN AMRO said speculative positioning is probing Tokyo’s tolerance for a weaker currency, as dovish Bank of Japan policy, looser domestic fiscal settings, and Japan’s structural energy-import reliance continue to weigh on the yen. They noted that fundamentals and positioning could allow USD/JPY to push toward 164.50, but emphasized that an unannounced intervention could trigger a fast and sustained turn.

ABN AMRO warned that market participants are heavily long the US dollar and short the yen, meaning any shift toward yen buying could “unravel” the trade quickly. Technical analysts at UOB said USD/JPY retains an upward bias but faces psychological ceilings near term, with the near-term path still described as gradual rather than runaway.

UOB highlighted support at 162.35 and said a break of 162.20 would shift the pair toward range trading instead of testing 162.80. FXStreet also reported that over a one-to-three-week horizon, the pair is expected to stay in a mixed pattern, with the risk of a sudden reversal remaining tied to intervention concerns.

Latest closeUSD/JPY 163.85 ▲0.1%

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