The USD/JPY has come under intense selling pressure and has dropped more than 500 pips after news that the Japanese government has intervened in the forex market to stem the yen’s rapid decline.
Japan’s top foreign exchange diplomat, Masato Kanda, confirmed in the last few minutes that they have intervened in the foreign exchange market. He added that the government “took decisive action in the foreign exchange market.”
Earlier, Kanda warned that “will respond appropriately to currency movements without ruling out any options“.
In response to the big move out of Japan, USD/JPY is in freefall and has broken several critical supports as yen bulls are finally being rescued. The pair reached the highest level in 24 years, at 145.90, before the Japanese authorities considered it necessary to intervene to save the local currency. The government stepped in to buy the yen for the first time since 1998.
Prior to the announcement, the major pair was trading near 145.80, adding more than 1% on the day, after benefiting from the Bank of Japan (BoJ) status quo. The BoJ kept its policy unchanged, maintaining its dovish bias. The Fed’s dovish outlook and the BoJ’s refusal to act pushed the currency pair to levels not seen in more than two decades.
At time of writing, USD/JPY is trading at 140.98, down -3.07% on the day.
USD/JPY technical levels
Source: Fx Street
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