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Yen weakens again as prior intervention fades
The yen remains pressured by a continuing US-Japan yield gap and Japan's expansionary fiscal stance, with focus on the next 48 hours around US CPI.
Action Forex reports the yen is sliding again after joint US-Japan intervention earlier pressured traders to retreat, but the move has not reversed the underlying driver of yen weakness.
The outlet says intervention has mainly changed short-term positioning by raising the cost of aggressively shorting the yen, effectively putting a speed limit on depreciation without fixing the fundamentals. It points to a still-substantial yield disadvantage versus the US and other major economies, alongside expansionary fiscal policy under Japan Prime Minister Sanae Takaichi.
Action Forex highlights the next 48 hours as a test, citing Japan's thin-liquidity holiday on Tuesday and Wednesday's US CPI as key catalysts for whether intervention deterrence still holds and whether the yen can find a genuine fundamental tailwind.
To illustrate the risk of a one-off intervention, the outlet references a prior episode during Golden Week, when Japan spent a record ¥11.73 trillion, about $73 billion, between April 26 and May 29 after USD/JPY broke above 160. It says the yen rebounded initially but then surrendered the gains within roughly eight to nine weeks once fundamentals stayed unfavorable.
Latest closeUSD/JPY 158.89 ▲0.9%