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Mar 28 - 06:55 PM

ING: Speculation on USD/JPY Intervention Threshold and Potential Impact

By eFXdata  —  Mar 28 - 03:00 PM


Speculation is mounting regarding Japan's potential intervention in the FX market following a recent meeting among key Japanese financial institutions. ING suggests that intervention could occur if USD/JPY surpasses the 152 mark, possibly in the 153-155 range, aligning with previous intervention patterns in 2022. Unsterilized intervention, which would not offset the liquidity effects of FX sales, could significantly impact money markets, particularly in the context of the Bank of Japan's (BoJ) recent shift towards a tighter monetary policy stance.

Key Points:

  • Intervention Threshold: Japanese authorities are closely watching USD/JPY movements, with potential intervention anticipated if the pair exceeds 152, specifically targeting the 153-155 range.

  • Previous Intervention Reference: Japan's last intervention in the FX market occurred in September and October 2022, involving approximately US$65bn to counteract yen depreciation.

  • Consideration of Unsterilized Intervention: Unlike previous instances, Japan may opt for unsterilized intervention this time, leading to a net yen liquidity drain and affecting money markets. This approach aligns with the BoJ's tightening monetary policy orientation.


Amid rising speculation about Japan's intervention in the FX market to support the yen, ING pinpoints a critical threshold for USD/JPY that could trigger such actions. With the possibility of unsterilized intervention, the financial landscape could witness significant shifts, especially given the BoJ's recent pivot towards a more restrictive monetary policy. The global financial community remains vigilant, awaiting Japan's potential strategic moves in the FX domain. 

ING Research/Market Commentary


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