Japan-US Joint Intervention Sparks Yen Support Amid USD/JPY Volatility
The joint intervention by Japan and the US has caused a stir in the currency market. MUFG believes this could be a turning point for the yen, citing quicker BOJ rate hikes as a potential tailwind to bolster support for the currency.
This comes after the BOJ announced it would continue normalising monetary policy as part of the joint intervention decision. The firm points out that Mimura's comment on having a 'shared understanding with the BOJ' suggests a coordinated effort between the two central banks.
BofA also acknowledges the impact of the joint intervention, but views the 155 mark as a key threshold in defining what comes next for the currency pair. If the USD/JPY breaks below 155, it could trigger stop-loss selling and encourage corporate hedgers to shift toward selling USD/JPY on rallies.