Japanese Yen Weakness Trumps Joint Intervention Impact

The Japanese Yen has experienced weakness that offsets the impact of recent joint intervention between the US and Japan, according to MUFG's Michael Wan.

This is evident in the Dollar Index's (DXY) recovery, which is seen as largely driven by JPY underperformance. The USD/JPY exchange rate has risen closer to 159 levels, while EUR/JPY has reached 185.71 levels.

The return of US longer-end yields to pre-buyback levels is also weighing on risk assets. The 10-year yield is at 4.7%, and the 30-year yield is at 5.24%.

Wan notes that fundamentals matter, and intervention is unlikely to change market trends without underlying macro shifts. This view suggests that recent joint FX intervention and US Treasury buyback announcements have had limited impact on the currency markets.