USD/JPY enters intervention zone
The USD/JPY has rallied back up to the level of previous multi-year highs in the 151.000s. Both in October 2022 and 2023 the pair rose to the 151.000s amid JPY weakness and USD strength, however, both times it was pushed back down.
The reason for the reversal at this level has been put down to the fact it is an intervention zone for the BoJ. Above 150.000 the Yen becomes uncomfortably weak for the BoJ and it tends to intervene to prop it up using its FX reserves to buy Yen, according to analysts at MUFG.
“A break of that high (2023 high) could well be accepted in Tokyo but we would still assume intervention would happen quite soon after that, especially with the BoJ’s action this week at least now consistent with Yen buying intervention.”
This suggests USD/JPY could be close to a peak.
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