USD/JPY Pair Tests Resistance at 156.70 Amid Uncertainty Over Recent Plunge

The Japanese Yen (JPY) is gaining strength against the US Dollar (USD), marking its strongest weekly performance since July's coordinated intervention between the US and Japan.

The USD/JPY pair bounced from lows at 155.30, but upside traction remains weak, with previous support at 156.70 likely to pose significant resistance.

Analysts at MUFG note that it is unclear whether the 500-pip plunge in USD/JPY between Wednesday and Thursday was driven by FX intervention or Bank of Japan current account data.

The BoJ Board Member Takata's speech left the door open for an outsized interest rate increase, underscoring the risk of a faster pace of tightening if conditions warrant.