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Apr 29 - 12:55 PM

ING: Japan Likely Intervened in FX Market, Traders Likely Cautious Testing USD/JPY Near 160 Again

By eFXdata  —  Apr 29 - 10:38 AM


ING analyzes the recent sharp movements in USD/JPY, suggesting strong indications of Japanese intervention in the FX market. The bank highlights the rapid market response and the strategic implications for traders, particularly in light of upcoming U.S. economic events.

Key Points:

  • Potential Intervention: Early morning trading saw USD/JPY hit the 160.0 mark before experiencing significant volatility, characterized by sharp declines followed by partial recoveries. This pattern, combined with the timing and magnitude of the moves, suggests potential intervention by Japanese authorities.

  • Market Response: After touching 160.0, USD/JPY faced a substantial drop to 157.20, with movements exhibiting classic signs of currency intervention such as sudden large shifts and increased trading volume. The timing on a Japanese public holiday may have also amplified the effects due to thinner liquidity.

  • Official Comments: Japan's top currency official, Masato Kanda, has not confirmed the intervention, maintaining a stance of "no comment for now." This lack of official confirmation keeps the market on alert for any further clarifications.

  • Historical Context and Market Dynamics: The situation mirrors actions from September 2022 when Japan intervened in the market with an estimated $20bn. Following the initial intervention last year, USD/JPY eventually stabilized at levels moderately below those pre-intervention. ING anticipates a similar trajectory could unfold, setting a near-term resistance level for USD/JPY around 156.50 based on past patterns.

  • Future Outlook and U.S. Economic Events: With a week full of significant U.S. economic events, including potential signals from the Federal Reserve, the yen could face renewed pressure. Traders may be cautious about driving USD/JPY back to the 160 level, mindful of Japan's possible ongoing intervention strategy and the risks of re-testing the authorities' resolve.


ING's assessment suggests that the recent volatility in USD/JPY likely indicates an intervention by Japanese authorities, though official confirmation is still pending. Traders are advised to be cautious, particularly given the likelihood of additional U.S. economic developments that could impact the currency pair. The situation remains fluid, with market participants keenly awaiting further signals from Japanese officials and upcoming U.S. data that could influence future movements and intervention strategies in the FX market.

ING Research/Market Commentary


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