Home Sports USD/JPY traders fear official intervention as 150 approaches

USD/JPY traders fear official intervention as 150 approaches


USD/JPY Price and Chart Analysis

  • USD/JPY breaking above 149.00 as US Treasury yields remain under control.
  • The Minister of Finance warns of “excessive steps”.

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The Japanese yen continues to weaken against Art US dollar and earlier during the session traded at lows last seen in August 1990. Little has changed for the yen with Japanese officials seemingly willing to allow the currency to weaken further by capping bond yields. The yield on the 10-year JGB is capped at 0.25%. In contrast, US Treasury yields continue to trade at or near multi-year highs as the Fed continues to raise interest rates. The rate-linked 2-year UST is trading at a yield of around 4.45%, while the benchmark 10-year UST is quoted at a yield of 4.00%, about 375 basis points higher than the equivalent JGB.

Monthly Chart of the 10-Year US Treasury Yield October 18, 2022

Chart via TradingView

Bank of Japan (BoJ) – Intervention in the foreign exchange market

They are the last to drive in USD/JPY prompted Japanese Finance Minister Shunichi Suzuki to warn of possible intervention to calm excessive moves in the currency market. Suzuki said the authorities were “closely monitoring market movements” and that they would make an “appropriate” response at any time to calm excessive volatility. The Bank of Japan intervened in the market last month by selling USD/JPY, but its actions failed to stop the pair’s continued weakness. With the psychological level of 150 in the near distance and the yield spread between the two currencies widening further, the markets may soon test the resolve of the finance minister.

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USD/JPY Daily Price – October 18, 2022


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Retail trader data shows that 18.31% of traders are net long with a trader short to long ratio of 4.46 to 1. The number of traders tent long is 11.53% higher than yesterday and 5.84% lower than last week, while the number of net-short traders is 5.23% higher than yesterday and 9.20% higher than last week.

We generally take a contrarian view on crowd sentiment, and the fact that traders are net short suggests that USD/JPY prices may continue to rise. The positioning is less clean than yesterday, but cleaner than last week. The combination of current sentiment and recent changes gives us further USD/JPY mixed trade bias.

customers pure long.

customers pure short.

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Every day 7% 5% 5%
Every week -8% 12% 7%

What is your view on USD/JPY – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1.


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