The US Dollar (USD) declined by 0.3% to trade near 159.65 against the Japanese Yen (JPY) during the European session on Monday, as the Yen outperformed its peers amid growing expectations of support from a potential US-Japan joint intervention in currency markets [1]. This move follows recent media reports highlighting a significant $96.4 billion intervention effort to support the Yen from July 30 to August 26 [1]. US Treasury Secretary Scott Bessent indicated that Washington would be prepared to intervene with Japan to stabilize the Asia-Pacific currency if necessary, referencing a prior joint intervention in late July when USD/JPY surged to a multi-decade high near 164.00 [1].
Market focus has shifted to upcoming US economic data releases, including the ISM Manufacturing PMI for August and the JOLTS Job Openings data for July, scheduled for Tuesday [1]. Meanwhile, the US Dollar Index (DXY), which measures the Greenback against six major currencies, was down 0.16% to around 99.50 as of the report [1].
From a technical perspective, USD/JPY was trading at 159.66, maintaining a mildly bullish near-term bias as it remained above the 20-day exponential moving average (EMA) at 159.55 [1]. The Relative Strength Index (RSI) stood at 49.39, indicating consolidative conditions but with a slight topside bias as long as the price stays above the short-term EMA [1]. Key support is identified at the August 19 low of 158.05, while resistance levels are noted at the Friday high of 160.20 and the July 31 high of 160.88 [1].
Analysts at Scotiabank described the recent defensive price action as notable and somewhat worrisome for policymakers at the Bank of Japan (BoJ) and the Ministry of Finance (MoF), given the scale of recent interventions and the ongoing volatility in the currency pair [1].
CONCLUSION
The USD/JPY pair is experiencing renewed selling pressure as intervention expectations and recent policy actions support the Yen. Market participants are closely watching upcoming US economic data for further direction, while technical indicators suggest a consolidative but mildly bullish bias above key support levels. Policymakers remain vigilant amid ongoing volatility and the potential for further intervention.