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USD/JPY set for wider range as joint intervention backs yen, HSBC says

HSBC links the yen’s rebound to coordinated Japan Ministry of Finance and US Treasury support on July 30 and 31, and expects the range to broaden without a change in Japan’s real-rate and fiscal outlook.

Reported · Written up by our desk · Major Pairs

HSBC strategists told FXStreet that the US dollar to Japanese yen pair is likely to stay mostly range-bound, with the trading band potentially widening, after coordinated yen support from Japan and the United States.

They pointed to a sharp post-intervention drop in USD/JPY following joint action by Japan’s Ministry of Finance and the US Treasury on July 30 and 31, with both authorities confirming the effort on August 3 and saying they would act again if needed.

HSBC argued that joint intervention is generally more effective than unilateral moves, but it is unlikely to reverse the broader USD-JPY downtrend without improving Japanese fundamentals.

The strategists said a sustained yen recovery would likely require more attractive real interest rates in Japan and reduced fiscal concerns, while they also cited possible shifts in Japan-related capital flows and ongoing uncertainty around factors that could influence policy and positioning.

Latest closeUSD/JPY 159.27 ▲0.5%

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