Japanese Yen Strengthens Sharply Amid Intervention Expectations

As the USD/JPY chart shows, the exchange rate fell sharply, reaching its lowest level since early November 2025.

The sudden strengthening of the yen has been driven both by expectations ahead of the upcoming Bank of Japan meeting and by growing speculation about a possible currency intervention, which could be carried out jointly by the Japanese authorities and the US Federal Reserve.

According to media reports:

→ on Friday, the New York Fed took specific actions that were interpreted as potential precursors to an actual intervention, providing the first bearish impulse;

→ on Sunday, Japanese Prime Minister Sanae Takaichi stated that the government would take “necessary steps” against speculative market movements — reinforcing the initial momentum at the market open on Monday.

Technical Analysis of the USD/JPY Chart

Last week, when analysing movements in the dollar–yen exchange rate, we identified a long-term ascending channel and also:

→ highlighted a number of bearish signals;
→ suggested that the lower boundary of the channel was at risk of a bearish break.

Notably, after that analysis, another bearish signal emerged on the USD/JPY chart — a bull trap (marked by the arrow) above the 159 level — followed by a break below the channel’s lower boundary.

At the same time, if a parallel channel of equal width is projected lower, its bottom boundary appears to be providing some support, slowing the pace of the decline.

It cannot be ruled out that emotions will subside and the market may attempt a rebound — for example, towards the bearish gap area around 155.5. However, the aggressive nature of the USD/JPY sell-off suggests that sellers are taking control after many months of sustained upward movement.

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