USD/JPY: TD Securities highlights renewed concerns about intervention

TD Securities Highlights Increased Risk of Yen Intervention

According to TD Securities strategists Alex Loo and Prashant Newnaha, the likelihood of intervention in the Japanese Yen is rising as the USD/JPY exchange rate approaches 160, nearing its highest point of 2024 prior to action by Japan's Ministry of Finance. They point to the upcoming Japanese holiday, reduced market liquidity, and the Trump–Takaichi summit as possible triggers for coordinated efforts between the US and Japan. However, they remain skeptical that such measures would halt the overall strengthening of the US Dollar against the Yen.

Market Alert: Yen Intervention Concerns Grow

Japan is about to begin a three-day holiday, but investors are staying vigilant due to the current USD/JPY levels and the Trump–Takaichi meeting in the United States.

With USD/JPY hovering near 160—just below the 2024 peak of 162 before the Ministry of Finance stepped in—risks of intervention are once again elevated. There is a possibility of joint action by US and Japanese authorities, especially given the limited liquidity during Japan's holiday. The last time both countries intervened together was in 1998, and such a move could potentially cause USD/JPY to fall by approximately 5 to 6 figures.

While coordinated or solo interventions might deter speculative trading, TD strategists doubt these efforts would be enough to reverse the ongoing upward trend in USD/JPY. The currency pair is currently moving in tandem with rising US yields and shifts in oil prices, with further increases in oil likely following recent disruptions to Middle Eastern oil infrastructure.

(This report was generated with assistance from an AI tool and subsequently reviewed by an editor.)