Japanese Yen steadies near post-intervention highs ahead of BoJ Minutes

USD/JPY trades with a soft tone near the 156.90 area on Monday as the Japanese Yen (JPY) holds the bulk of the gains secured at the end of last week, when intervention by Japanese authorities and a relatively hawkish Bank of Japan (BoJ) policy announcement triggered a sharp unwind in the pair.

Speculation that officials remain active in the market continues to cap attempts at recovery. Japanese authorities have offered no confirmation of last week's operation, but several news outlets reported the invention last Friday based on interviews with sources close to the BoJ. Ministry of Finance officials have limited their commentary to warnings that excessive, one-sided moves are undesirable and that they stand ready to act against disorderly conditions. That deliberate ambiguity is keeping traders reluctant to rebuild large Yen-short positions, with liquidity thinning around the figure levels where intervention is suspected to have been executed.

Attention now turns to the release of the BoJ Monetary Policy Meeting Minutes during the Asian session on Wednesday, which covers the June gathering and precedes both the intervention episode and last week's rate decision. While the document is dated, investors will scrutinize it for evidence that the hawkish tilt seen in the latest vote split was already building within the board. Any indication that a wider group of members had begun flagging upside inflation risks would strengthen the case for a follow-up rate increase and provide the Yen with an additional pillar of support.

The BoJ left its short-term rate unchanged at 1.00% last week in an 8–1 vote, with Governor Kazuo Ueda signaling that the central bank could accelerate the pace of tightening and would avoid falling behind the inflation curve. Markets have since brought forward the expected timing of the next hike, narrowing the interest rate differential that has driven the pair to multi-decade highs this year.

On the other side of the equation, the United States (US) ADP Employment Change is due on Wednesday, with the private payrolls gauge seen easing to 70K in July from 98K in June. A print in line with or below that estimate would point to a cooling labor market and could undermine the recent rebound in Treasury yields, adding to the pressure on USD/JPY.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 157.02, maintaining a bearish near-term bias as it holds beneath both the 20-period Simple Moving Average (SMA) at 160.36 and the 100-period SMA at 162.32. The pair is attempting to stabilize after the recent slide, but downside pressure remains evident, with the Relative Strength Index (RSI) hovering near oversold territory around 23, hinting that selling momentum could be stretched yet not decisively reversed.

On the topside, immediate resistance emerges at 157.15, followed by the recent horizontal cap at 157.94; a recovery above these levels would be needed to alleviate the current bearish tone. On the downside, initial support is located at 156.30, ahead of a stronger floor at 155.24, and a sustained break beneath these levels would reinforce the broader corrective phase in the pair.

(The technical analysis of this story was written with the help of an AI tool. Know more.)