Through joint efforts, Japan and the US managed to force USD/JPY bulls to retreat, so there was no need to spend money on currency interventions. As a result, the yen has stabilized. Let's discuss this topic and make a trading plan.
The article covers the following subjects:
Major Takeaways
- The US and Japan could jointly intervene in the Forex market.
- The BoJ attempted to postpone the expected rate hike.
- The yen received the necessary support.
- Long trades on the USD/JPY pair can be considered on a rebound from 153 and 151.5.
Weekly Fundamental Forecast for Yen
Rumors of coordinated currency interventions by the US and Japan quickly sent the USD/JPY pair tumbling. The Bank of Japan and the New York Fed contacted financial institutions to ask about the yen's price against the US dollar. The latter conducts financial transactions on behalf of the Treasury. Its head, Scott Bessent, expressed concern about the sale of debt securities.
Japan is the largest, if not the largest, creditor in the world. Its government and investors hold $1.2 trillion in US Treasuries. At the same time, Sanae Takaichi's plan to hold early elections, win, and lower taxes means new bonds need to be issued. Tokyo is in desperate need of buyers who demand higher yields.
To retain foreign investors, yields should be higher in other countries as well. For this reason, Scott Bessent attributes the rally in Treasury yields to events in Japan. One way to address this issue is through a stronger yen, which would draw attention to Japanese assets.
USD/JPY Performance and Currency Interventions
Source: Bloomberg.
Therefore, Tokyo and Washington have common goals. It makes the market think about coordinated currency interventions. Such interventions took place in 1998 and 1985. At the beginning of 2025, investors were actively discussing a Mar-a-Lago agreement modeled on the Plaza Accord aimed at a large-scale weakening of the US dollar.
The last time Japan intervened in the Forex market was almost two years ago, in July, with $35 billion, and its total currency interventions in 2024 exceeded $100 billion. Notably, the BoJ fought USD/JPY bulls alone. However, when Washington joins in through the New York Fed with an unlimited amount of dollars to sell, the story is completely different.
Forecasts for Inflation in Japan
Source: Bloomberg.
The Bank of Japan initiated the decline in USD/JPY quotes. It presented higher-than-expected inflation forecasts. In addition, Kazuo Ueda talked about April, when data on wages and inflation will be released. In both cases, the goal was to shift the timing of the expected overnight rate hike from June-July, as markets expected, to an earlier period.
Further requests from Tokyo and Washington, statements about their coordinated actions, and even Sanae Takaichi's words that Japan would take measures to address speculative and extremely abnormal movements in the Forex market strengthened the yen.
Weekly USDJPY Trading Plan
Most likely, the government's game of cat and mouse with speculators has ended. The USD/JPY pair has fallen to the target. At the same time, a rebound from 153 and 151.5 could trigger a consolidation, allowing investors to open long positions.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of USDJPY in real time mode
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