Yen Intervention Sends CAD/JPY into Free Fall Below Key Support

The Japanese yen has strengthened against most currencies around the world after the Bank of Japan and the Federal Reserve intervened in the markets to defend it. The CAD/JPY currency pair plunged below the 112-yen level for the third day in a row, which is an area previously considered significant as support.

This trend follows the central banks' efforts to slow down the yen's decline, with Christopher Lewis pointing out that their primary goal is not to reverse the trend but to control its speed. The 112-yen level had been crucial in January and February, but it was breached on Monday after initial attempts to recover.

Lewis notes that while the interest rate differential between Japan and other countries will eventually become a problem for the yen, central banks are currently focused on slowing down the currency's decline. He advises traders to be cautious when buying dips in this market and to maintain reasonable position sizes due to the risks involved.