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Japanese yen steadies near the 200-day EMA after record intervention
The yen is back around levels last seen in mid-May after Japan and the US spent a reported 8.45 trillion yen in one day and 5.3 trillion the next to support the currency.
FXStreet reports that the yen has stopped sliding after a surge of coordinated intervention, with the pair changing hands just above 157.50 and trading flat in a narrow range of less than 60 pips. The spot level is sitting directly on a rising 200-day exponential moving average, which has effectively become the market reference point.
The outlet says a week earlier the pair was near just under 164.00, described as a four-decade extreme, but it has since retraced to mid-May levels. FXStreet attributes the move to what it calls the largest coordinated intervention on record, estimating it has bought back roughly eleven weeks of yen depreciation.
FXStreet reports that Japan's Ministry of Finance was said to have spent 8.45 trillion yen in a single day, followed by about 5.3 trillion yen the next session. It also says the American Treasury joined in by buying yen for the first time since 2011, funding the purchase by selling euros rather than dollars.
The piece adds that price has held a narrow band around the 200-day EMA for three sessions without either side pressing, which FXStreet characterizes as the market waiting to see whether authorities conduct additional operations. It also notes the gap between the Federal Reserve’s 3.50% to 3.75% policy range and the Bank of Japan’s 1.00% rate remains the broader driver, while Japan’s June minutes pointed to risks around higher consumer inflation later in the fiscal year.