US-Japan Intervention Fails to Boost Yen Buying

The joint intervention by Japan and the US in the foreign exchange market has not led to sustained yen buying, according to MUFG. Despite the significant move, traders are being cautious in chasing a price above 160 for USD/JPY.

Market participants' appetite for buying the yen remains muted due to the recent large drop in USD/JPY and the lingering effects of the US-Iran conflict. The fundamentals for the yen currency are 'absolutely dreadful', making it an unattractive option for buyers.

Nomura estimates that Japan's Ministry of Finance (MOF) provided approximately ¥14.1 trillion ($88 billion) in intervention from July 30 to August 3, exceeding the amount spent in late April and early May.