ING's Francesco Pesole notes that the Japanese Yen (JPY) remains weak even on softer US Dollar (USD) sessions, suggesting markets want to probe official tolerance. Pesole highlights 160.0 as a key level, warning that a lack of intervention there could open a move back toward the late‑April intervention zone around 160.60‑160.70, with volatility metrics showing fading confidence in policy effectiveness.

Yen weakness challenges BoJ credibility

"Anyway, markets are clearly embedding the diminishing effectiveness of this intervention campaign, with one-month implied volatility still trading well below realised."

"Meanwhile, the yen has struggled to find any grip even during a softer USD session, signalling a bias to test the new FX intervention thresholds of the Japanese authorities."

"The key test sits at 160.0. Failing to intervene then should pave the way for a retesting of 160.60-.70, where the Bank of Japan stepped in on 30 April."

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