Japan-US Coordination Boosts Yen, Risks Market Volatility

The coordinated intervention by the U.S. and Japan has strengthened the yen, reversing over $2 trillion in carry trades and increasing market risk.

Unlike the August 2024 sell-off, this move is well-telegraphed with efforts to avoid disorder through larger Treasury buybacks and joint policy actions.

If USD/JPY holds above 153 and Treasuries stay stable, a controlled yen squeeze is possible; however, a drop below 152 could trigger risk-off sentiment.