USD/JPY Stalls Despite Intervention as BoJ Hike Path Remains Key

Japanese Yen (JPY) weakness continues despite recent intervention backed by US involvement. According to OCBC's Sim Moh Siong and Christopher Wong, USD/JPY has retraced almost 40% of its decline from the pre-intervention high of 164 to the post-intervention low near 155.50.

The pair is currently approaching 159, with some expecting intervention again if needed to stabilise the JPY. While US and Japanese authorities may be ready to intervene once more, questions remain over whether their efforts can reverse the underlying weakness of the JPY.

OCBC maintains its end-2026 USD/JPY forecast at 163. A more aggressive Bank of Japan (BoJ) hiking path and increased domestic capital flows back into Japanese assets could drive a more sustained JPY recovery, according to Siong and Wong.