Japan and US joint FX intervention fails to sustain yen strength, with traders resuming USD/JPY buying near 159 levels.
The yen’s rally stalled as USD/JPY climbed back above 159, eroding the impact of recent joint intervention by Japan and the US. Traders appear cautious about pushing the pair beyond 160 but remain inclined to sell the yen at current levels.
Market participants liquidated short USD/JPY positions after the yen’s sharp drop, but appetite for yen buying remains muted. Retail FX margin traders and carry strategies may drive renewed USD/JPY demand, reversing recent flows.
While intervention signaled short-term caution, fundamentals for the yen remain weak, particularly amid prolonged US-Iran tensions. Psychological factors continue to dominate USD/JPY movements, as seen since April.