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USD/JPY climbs above 160 as intervention deterrent fades
The yen rebounded to around 158.5 after a meeting readout, but the pair still remains near July highs despite recent large-scale intervention.
The yen’s latest strength was not enough to stop USD/JPY from trading just above 160.00 in Asian hours, the highest level since late July, before reversing to around 158.50 as renewed intervention chatter returned, according to FXStreet.
FXStreet said the effectiveness of intervention has weakened over time, citing large buy operations that started about six weeks ago, including reported Japanese selling of around $60 billion on Thursday and $25 billion on Friday, plus a further Monday tranche and an American leg estimated at about $5 billion to $10 billion.
The pair fell from near 164.00 to a low around 155.25, then largely retraced those losses within five weeks, with the outlet noting that Wednesday’s roughly two-yen move came on a meeting readout between Japan’s finance minister and the US Treasury Secretary in which both sides emphasized the importance of orderly moves.
FXStreet added that while Tokyo has access to a Federal Reserve facility that can raise dollar liquidity against Treasury collateral, the main limitation is that each intervention operation sells into a broader carry driven by Japan’s fiscal and bond supply outlook, and the next key trigger is the Bank of Japan decision scheduled for September 18.
Latest closeUSD/JPY 158.82 ▼0.9%