Japanese Yen: Intervention risk near 160 against US Dollar – OCBC

FXStreet Insights Team FXStreet

OCBC’s Christopher Wong says USD/JPY’s recent rally is moderating as UST yields and the Dollar ease, but the pair remains elevated. The bank warns Ministry of Finance intervention risk could rise if USD/JPY breaks into the 160–161 area in thin holiday liquidity. More durable Japanese Yen recovery would still require further BoJ tightening and a friendlier external backdrop.

Yen gains need more than intervention

"The recent run-up in USDJPY is starting to moderate slightly amid the pullback in UST yields and USD. Risk of MoF intervention may potentially rise if USDJPY pushes through the 160/161 area in coming sessions, especially during thin mkt liquidity with both US and UK markets out on Mon."

"Thin markets can amplify the impact of intervention, but intervention alone is unlikely to change the broader direction of travel for JPY. At best, it can slow the pace of depreciation and send a clear signal that policymakers are uncomfortable with disorderly moves around those levels"

"For JPY to recover more meaningfully, it would take more than just leaning against the wind. The BoJ likely needs to tighten further to get back ahead of the curve, while the external backdrop also needs to improve (i.e. geopolitical risks de-escalate, oil prices ease and US yields pull back)."

"Mild bullish momentum on daily chart intact while rise in RSI moderated. 2-way risks likely from here."

"Resistance at 160, 160.70 (previous high). Support at 157.50 (100 DMA, 38.2% fibo), 156.40 (50% fibo retracement of 2026 low to high)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD corrects lower after testing 1.3400

Following Monday's advance, GBP/USD touched its highest level since mid-June slightly above 1.3400 early Tuesday but lost its bullish momentum. The pair trades marginally lower on the day at around 1.3380 as investors adopt a cautious stance following news of Iran targeting commercial ships attempting to pass through the Strait of Hormuz.

EUR/USD holds above 1.1400 as markets focus on Middle East news

EUR/USD struggles to gain traction and trades in a narrow channel above 1.1400 on Tuesday after failing to reclaim 1.1450. The pair's upside remains capped amid a modest recovery in the safe-haven US Dollar, as renewed tensions in the Strait of Hormuz and Asian tech sell-off fuel risk aversion.

Gold recovers above $4,150 following earlier decline

Gold stages a rebound after dropping toward $4,100 earlier Tuesday and trades above $4,150 in the American session. Crude oil prices edge higher amid renewed tensions in the Strait of Hormuz, reviving inflationary concerns. This, in turn, triggers a fresh leg up in US Treasury bond yields, offering some support to the US Dollar, and making it difficult for the yellow metal to gain traction.

Bonk extends correction after $20 million hack from BonkDAO treasury

Bonk remains under pressure, trading below $0.0000044 after losing over 10% in the previous day. Monday’s correction occurred as Bonk Decentralized Autonomous Organization announced a governance exploit that resulted in the theft of $20 million worth of BONK tokens from its treasury.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance, arguing that the current world demands more flexibility.