USD/JPY: Watching for signs of intervention – OCBC

Move higher in USD/JPY was a reflection of hawkish Fed cut and disappointment over dovish BOJ hold. USD/JPY last seen at 154.16 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Verbal intervention may only slow the JPY’s decline

"Daily momentum turned mild bullish while rise in RSI moderated near overbought conditions. Resistance at 154.40 (76.4% fibo retracement of 2025 high to low). Support at 153.30 (previous double-top), 151.60/80 (21 DMA, 61.8% fibo)."

"Last week, Finance Minister Katayama has stepped by verbal intervention - that she’s seeing very one-sided, rapid currency moves. Verbal intervention may only slow the JPY’s decline at times but cannot change the broader market momentum."

"We watch if verbal intervention steps up intensity under the new Finance Minister or eventually progress towards actual intervention, as JPY bears may exercise caution. Ultimately for USD/JPY to turn lower would require a softer USD and BOJ showing more commitment to hike."