USD/JPY is trading near post-CPI lows following what appears to be another round of intervention by Japanese authorities. According to BOJ data, Japan may have spent over ¥3 trillion on intervention yesterday, which is more than expected given the strong momentum in the market. This suggests that dollar buyers are holding firm, even as the pair trades at 38-year highs.
The recent intervention has pushed USD/JPY lower, briefly breaking yesterday’s low before consolidating around that level. The main question now is what the authorities’ playbook is. While yesterday it seemed they were looking for a headline to support their actions, today’s move suggests that they may simply be trying to push the pair down on a daily basis.