OCBC strategists Sim Moh Siong and Christopher Wong highlight that recent USD/JPY moves likely reflect Japanese intervention, with 158 replacing 160 as the key line. They argue that intervention alone will not change the broader trend without stronger Bank of Japan (BoJ) policy and lower US yields or Oil. OCBC sees scope for further intervention to push USD/JPY into 150–155 and keeps its end‑2026 target at 155.

Intervention signals and policy limits

"USD weakened broadly overnight, but JPY price action stood out as the clearest policy signal. Moves were consistent with Japanese intervention, though authorities have not confirmed activity either overnight or last week."

"Market behaviour suggests official involvement. If 160 in USD/JPY marked the line in the sand previously, the latest trigger appears closer to 158."

"The key question is whether the Ministry of Finance will continue to defend the yen or has already deployed sufficient firepower. Intervention alone is unlikely to shift the broader trend unless backed by stronger policy support like a more assertive BoJ hiking cycle or better alignment with external drivers such as lower oil prices and US yields"

"Further intervention could push USD/JPY into the 150 to 155 range, especially if oil prices further decline. However, we remain cautious. A June BoJ hike looks likely, but policy still lags the curve, limiting sustained JPY support. We maintain our end-2026 USD/JPY target at 155."

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