The Japanese Yen (JPY) has held steady near 156.40 against the US Dollar (USD) during the early European session on Thursday, following a rally on Wednesday that was driven by speculation of official intervention in the foreign exchange market [2]. OCBC strategists Sim Moh Siong and Christopher Wong noted that recent USD/JPY moves likely reflect Japanese intervention, with 158 now replacing 160 as the key threshold for action. However, Japanese authorities have not confirmed any intervention activity either overnight or last week [1].
Japan’s top foreign exchange official, Atsushi Mimura, stated on Thursday that authorities are prepared to respond on all fronts to speculative moves in the foreign exchange market, but declined to comment on FX intervention or specific currency levels [2]. Last week, Japanese Finance Minister Satsuki Katayama also indicated that Japan can take action against speculative foreign exchange movements, reinforcing intervention fears that could support the JPY and act as a headwind for the USD/JPY pair in the near term [2].
OCBC strategists believe that intervention alone is unlikely to change the broader trend unless it is backed by stronger Bank of Japan (BoJ) policy, such as a more assertive hiking cycle, or better alignment with external drivers like lower oil prices and US yields. They see scope for further intervention to push USD/JPY into the 150–155 range, especially if oil prices decline, and maintain their end-2026 USD/JPY target at 155 [1].
The BoJ minutes from its March meeting, released Thursday, showed that many board members saw the need to raise interest rates if the Iran war-driven energy shock is prolonged and leads to broader inflation concerns. The minutes highlighted a hawkish bias that may reinforce market expectations of a rate hike as soon as June, as rising oil costs from the conflict add to inflationary pressure [2]. OCBC also notes that a June BoJ hike looks likely, but policy still lags the curve, limiting sustained JPY support [1].
Attention is also turning to upcoming US jobs data, with economists expecting a gain of 60,000 jobs for April and the Unemployment Rate projected to remain steady at 4.3%. Any signs of improvement in the US labor market could boost the Greenback against the JPY [2].
CONCLUSION
The Japanese Yen remains supported by intervention fears and hawkish signals from the Bank of Japan, but sustained strength may require more assertive policy action and favorable external conditions. OCBC maintains a USD/JPY target of 155 by end-2026, with further intervention possible if oil prices decline. Market participants are closely watching both Japanese policy moves and upcoming US jobs data for direction.