Japan\u2019s Ministry of Finance will publish on Wednesday the amount of Yen it bought between 27 August and 28 September, offering evidence on whether the reported 18 September rate check led to actual intervention. USD\/JPY ended Monday just under 157.50 after sliding from 159.00 on Friday; it traded down to 156.50 intraday before rebounding. The release spans the move up towards 159.00, so a zero reading would imply Tokyo has relied on verbal guidance and contacts with Washington, while a large figure would suggest a defence line near 159.00.<\/p>\n\n
Developments also turn on upcoming data. Japan\u2019s Tankan survey, due Wednesday at 23:50 GMT, is forecast to show the large manufacturers\u2019 index at 25 versus 22, with the outlook seen at 22 from 17. Tokyo CPI follows on Thursday at 23:30 GMT, with inflation excluding fresh food expected at 2.4% year on year after 1.8%; the Bank of Japan policy rate stands at 1.25% following its 18 September move. In the US, core PCE inflation is forecast at 3.4% on Wednesday, while the Fed\u2019s policy rate is 3.75%\u20134.00%, with payrolls due Friday. Technical levels cited include resistance at the 50-day EMA near 158.00 and Thursday\u2019s peak just above 159.00, with support at 156.50 and just under 156.00; daily Stoch RSI is near 66.<\/p>\n\n
We suggest derivative traders closely watch the Ministry of Finance’s upcoming report this Wednesday to see if recent warnings have teeth. This release will reveal whether Tokyo actually spent capital to support the Yen after its rate check on September 18. If the data shows zero actual spending, we expect the market to test Tokyo’s resolve by pushing USD\/JPY back toward the 159.00 level. <\/p>\n\n
We must factor in the growing political pressure from Washington, especially after President Trump expressed concerns to Prime Minister Takaichi about the weak Yen hurting US trade. Finance Minister Katayama’s coordinated efforts with Treasury Secretary Bessent make a joint US-Japan intervention highly plausible. Historically, joint actions carry immense weight, such as the massive June 1998 joint intervention which successfully reversed the Yen’s sharp decline.<\/p>\n\n
On the fundamental front, we are preparing for a busy week with Japan’s Tankan survey and Tokyo’s CPI, which is forecast to jump to 2.4% from 1.8%. With the Bank of Japan’s policy rate currently at 1.25%, rising inflation pressures will likely force policymakers to consider another rate hike this year. Meanwhile, strong US economic data, including a forecast 3.4% core PCE, keeps the Federal Reserve on track to raise rates from its current 3.75%-4.00% range.<\/p>\n\n
Given these opposing forces, we favor holding long positions on USD\/JPY as long as the price stays above the key support floor of 156.50. Derivative traders should target the 50-day Exponential Moving Average near 158.00 and potentially push toward 159.00, where heavy intervention risk lies. However, we recommend tight risk controls and flipping to a bearish bias if the pair achieves a daily close below 156.50.<\/p>\n\n\n\n