Yen Steadies as Tokyo Issues Intervention Warnings

The Japanese yen has steadied in recent days after Tokyo stepped up intervention warnings.

Donald Trump's comments on the yen's appreciation have been echoed by US and Japanese finance ministers, with Japan's top currency diplomat Atsushi Mimura issuing further warnings to USD/JPY bulls.

The previous coordinated currency intervention between the US and Japan cost approximately $96 billion. Speculators' reaction triggered a pullback in the USD/JPY from its recent high, while hedge funds have been net buyers of the yen for two consecutive weeks.

The derivatives market indicates a 62% probability of two Fed rate hikes by the end of 2026, with the odds of the federal funds rate reaching 5% within 12 months standing at roughly one in three.