USD/JPY Outlook Shifts After Coordinated Intervention
The Japanese Yen's recent gains against the US Dollar may be short-lived according to some experts. After last week's coordinated intervention by the US and Japan, analysts from top commercial banks agree that the near-term bias of the USD/JPY pair has shifted.
FX analysts at Rabobank point out that JPY net shorts had reached their highest levels since 2024 before the intervention, and expect a sharp change in positioning with the next data release.
MUFG/BTMU notes that comments from Japanese Finance Minister Satsuki Katayama have revealed plans to use the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility in the future. This facility would allow Japan to access up to $60 billion per day without selling Treasuries for up to seven days.
The analysts at MUFG/BTMU believe that with support from the US, Tokyo's actions to shore up the Yen will be viewed as more credible and effective, potentially reducing the need for further intervention and Treasury sales.