USD/JPY Falls Below Wedge After Japan’s $34.5B Intervention

Japanese authorities reportedly spent about $34.5 billion on foreign-exchange intervention on April 30, after which USD/JPY fell 2.4% to 155.49, a two-month low recorded on May 1. The dollar then recovered about 1.5% over the next three sessions to reach roughly 157.94. In the Asian session on Wednesday at around 12 p.m. Singapore time, the pair plunged again, slipping from about 157.83 to roughly 155.80 within 15 minutes.

The intraday decline pushed the pair below the support line of an ascending wedge near 157.55. Technical analysts view the break below that support as evidence of renewed short-term downside pressure, with resistance now cited around 157.30–157.55. Near-term support levels referenced by chart analysts include 155.55, 154.65 and 154.05, the latter close to the 200-day moving average. A lower technical target noted by analysts is 152.65, which aligns with a Fibonacci extension.

Traders noted the speed and size of the intraday moves and linked them to a possibility of further official action or heavy selling. Market participants said the reported April 30 intervention and the subsequent volatility have increased sensitivity in the FX market and raised speculation that authorities would intervene again if the dollar resumed gains against the yen.

Kelvin Wong, a senior market analyst based in Singapore, wrote that “It smells like a second round of intervention.” Japanese authorities have intervened in the currency market at times to counter sharp moves in USD/JPY; the end-April operation followed a prior verbal warning and was followed by volatile trading in early May.