The threat of intervention is back! Is the dollar at risk of falling sharply against the yen?

Daocheng Technology Finance -dollarMonday (March 25) remains active and willYenThe pressure is near multi-decade lows, but the threat of currency intervention by Japanese authorities has prevented the dollar from strengthening further.

USD/JPYThe latest reading was 151.22, which rose to a four-month high of 151.86 last week, just shy of the 32-year high set in 2022 at around 152.

                                (Dollar/Japanese Yen one-hour chart)
Japan's finance ministry said on Monday that the current weakness in the yen did not reflect fundamentals, echoing warnings from several government officials that the yen had fallen in recent days.

Bank of JapanCrucially, traders also believe Japanese rates will remain low for some time, keeping them close to the same level as the March policy meeting, where a landmark rate rise was widely heraldedUnited StatesThe sharp interest rate difference.

"The verbal intervention of Japanese officials has made 152 a very strong resistance level for USD/JPY in the near term," said the Commonwealth Bank of Australia (CBA).foreign exchangeCarol Kong, strategist, said: "The market is fully aware that the [Japanese] authorities may actually intervene in foreign exchange, so I don't think this will allow the dollar/yen to rise significantly."

"I think the risk of the authorities stepping in to prop up the yen is still high if the dollar/yen spikes to Y155," said Ms Kong. "That's still seen as a bottom line."

Although the January 22-23 meeting of the Bank of Japan's policy committee is history, the minutes show that the committee had not yet made a decision on changing the yield curve control and negative interest rates, which should have been the decisive factor affecting the policy change in March after the January meeting.

But what exactly? There is no obvious direct factor, perhaps inflation data? But prices are still volatile. Analysts believe that it may also be to build market expectations, or it may be that the Bank of Japan needs toFederal ReserveTake action before easing policy.

The shift in the outlook for global interest rates after a series of central bank meetings last Monday injected new life into the dollar, as markets expected the Federal Reserve to keep interest rates higher for longer while other central banks began to cut rates.

After the Swiss National Bank became the first major central bank to cut interest rates last week, market sentiment towardsEuropean Central BankAnd bets on the Bank of England to cut interest rates in June have risen sharply.

In contrast, while the market expects the Federal Reserve's easing cycle to begin in June, a series of resilient economic data in the United States has raised doubts about whether the Federal Reserve will indeed cut interest rates three times this year. 

Dollar indexOn Monday, the Asian market fluctuated slightly and is currently down 0.1%, trading around 104.33. USD/JPY fell back from 151.43 to 151.09 before rebounding and is currently trading around 151.22.

largeoptionThe barrier is said to be still at 152.00, and the short order stop loss is above 152.00, but Japanese exporters are waiting for an opportunity to break free, and importers' operation will be the key.

Keep an eye out for support near the 151 integer mark in the short term below. If you try this position, the USD/JPY may further test the key position at the 150 integer mark.