Their previous attempts since last week were thwarted by buying closer to the 155.50-70 region. But after a push towards the 158.00 mark yesterday, Tokyo officials look to be saying enough is enough and are going hard on the intervention push today. The latest round of yen buying support from the MOF now sees USD/JPY fall to its lowest in ten weeks.
Will this be enough to break the conviction among yen sellers? At least temporarily perhaps? The key will be for a clean break below 155.00 and I reckon that will help further reset some positioning plays in the pair. Otherwise, we could see some speculators still hang in there somewhat.
As a reminder, the idea by Japan now is to try and buy some time for the Middle East conflict to resolve.
The fact remains that the fundamental backdrop is overwhelmingly bearish for the yen currency. And that will not change unless something changes to the US-Iran war, especially with the Strait of Hormuz situation.
So, they are still up against a challenging backdrop. However, they are also letting markets know that they are not to be messed about after having delivered warning after warning.
The message from Tokyo officials is that if you want to buy this dip, do it at your own risk.
