The upward momentum in USD/JPY is losing steam, with Japanese officials intensifying their warnings over rapid yen weakness. The pair was last trading near 156.30, according to OCBC FX strategists Frances Cheung and Christopher Wong.
Japan Signals Heightened Concern Over Yen Declines
Growth Minister Minoru Kiuchi said the government is monitoring currency moves—including speculative trading—with a strong sense of urgency. This follows comments last Friday from Finance Minister Katayama, who warned that yen depreciation has become “extremely one-sided and rapid.” OCBC notes that intervention talk is becoming increasingly frequent, and the risk of authorities “leaning against the wind” grows if USD/JPY pushes toward the 158–160 region.
However, the analysts add that a sustained reversal in USD/JPY would require broader policy adjustments. Japan would need fiscal discipline to rebuild credibility, and the Bank of Japan would have to advance policy normalization, while a softer USD would also be necessary. Any intervention is likely to slow, but not reverse, the yen’s broader depreciation trend.
From a technical perspective, OCBC highlights that daily momentum remains mildly bullish, though the RSI has eased from overbought levels. Key support levels sit at 154.40/50 (21-DMA, 76.4% Fibonacci), followed by 151.60 (61.8% retracement and 50-DMA). Resistance is seen at 158, 158.87 (2025 high), and 160.
