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Apr 25 - 09:55 AM

MUFG: Building Pressure for Yen Intervention Ahead of BoJ Meeting

By eFXdata  —  Apr 25 - 08:55 AM


As the USD/JPY surpasses the 155.00 level, MUFG discusses the increasing ineffectiveness of verbal interventions by Japanese officials and the growing market pressures for direct action to support the weakening yen. This comes ahead of a critical policy meeting by the Bank of Japan (BoJ), where market participants will be keenly watching for any shift in policy rhetoric or indications of possible intervention.

Key Points:

  • Recent Yen Weakness: The yen has weakened by nearly 6% against the US dollar from last month’s lows, continuing to decline despite repeated verbal interventions from Japanese officials. The USD/JPY's rise above 155.00 highlights the diminishing impact of these statements on market behavior.

  • Ineffectiveness of Verbal Intervention: Recent comments by Finance Minister Suzuki, including reiterations of close monitoring and readiness to act, have not succeeded in halting the yen’s depreciation. This has led to increased skepticism about the willingness and readiness of Japanese authorities to intervene directly in the FX market.

  • Pressure for Action: With the USD/JPY now trading above previously watched levels like 152.00 and 155.00 without any intervention, there is growing pressure on Japanese officials to move beyond rhetoric to tangible policy actions. Market participants are testing the resolve of Japan's MoF and BoJ to defend the yen amid rising US yields and a strengthening US dollar.

  • BoJ Policy Meeting Expectations: While a more hawkish tone is anticipated from the BoJ at the upcoming policy meeting, there is skepticism about whether policy rhetoric alone can counter the strong trend of yen weakening. Market participants are looking for definitive steps rather than mere verbal indications.


As the BoJ approaches its April policy meeting, the efficacy of verbal intervention by Japanese officials is under scrutiny, with market forces seemingly demanding more decisive action to support the yen. The outcome of the meeting could be pivotal in determining the near-term direction of USD/JPY, as traders and investors gauge the potential for real intervention or policy shifts.

MUFG Research/Market Commentary


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