USD/JPY: Upside capped after intervention – TD Securities

TD Securities strategists see USD/JPY consolidating around 157.00 in Q2 2026 after the recent Japanese Ministry of Finance (MoF) intervention triggered a 3% drop. They argue that markets now treat 160.00 as a line in the sand, capping upside and deterring fresh longs, while the pair is expected to retrace pre‑intervention levels more slowly than in past episodes.

Consolidation with 160.00 acting as cap

"USD/JPY dropped 3% last Thursday on MoF intervention."

"With markets now treating 160.00 as an implicit line in the sand, the upside in USD/JPY looks increasingly capped, which should deter speculators from re-engaging in long USDJPY."

"We also expect it to take longer to retrace back to pre-intervention levels than in prior episodes: historically, the MoF has leaned against speculative, volatile moves rather than defending a precise spot level."

"After last week's JPY intervention, path of least resistance for USD/JPY is likely a consolidation around our Q2 forecast of 157.00."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)