Bank of Japan watch – MUFG says USD/JPY in the danger zone for intervention

<p>MUFG is wary of Bank of Japan intervention in the yen, citing USD tailwinds (from the Federal Open Market Committee (FOMC) minutes specifically) and JGB yields.</p><ul><li>The short-term bias remains favourable for the Dollar and the minutes and the data support that view.
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The further strengthening of the Dollar has brought USD/JPY into the danger zone for intervention to halt the move higher. Resistance to a higher USD/JPY could at least involve allowing the 10-year JGB yield to drift further higher. You cannot fight a weaker Yen and higher yields in a credible manner.
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From an intra-day low on 28th July, USD/JPY is 8 big figures higher so this move is of a scale that could justify action.</li></ul><p>Since the note USD/JPY has dribbled a little lower, a stay of execution.</p><p>ps. <a href="https://www.forexlive.com/centralbank/jpy-alert-the-clear-signals-to-watch-for-imminent-bank-of-japan-fx-yen-intervention-20230701/" target="_blank" rel="follow" data-article-link="true">JPY alert: The clear signals to watch for imminent Bank of Japan FX yen intervention</a></p><p>—</p><p>Mitsubishi UFJ Financial Group is the world's second-largest bank holding company and second largest public company in Japan.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.