The dollar-yen exchange rate plunged into the ¥155 range temporarily after Japan and the United States carried out coordinated intervention again, but expectations of a renewed approach to ¥164 have since been reported. The article also examines the background to the intervention and movements in key technical levels.
The Japanese and US governments carried out a series of interventions at the end of July, with Japan intervening unilaterally on 30 July and Japan and the United States conducting coordinated intervention on 31 July. As a result, the dollar-yen exchange rate plunged to ¥155.23 on 3 August.
The market moved sharply before and after the intervention. Although the exchange rate briefly returned to the ¥155 range after the intervention at the end of April and in early May, it rose to ¥163.99 on 23 July, reaching a level not seen since November 1986.
The decline has been analysed as having triggered a bearish signal, with the dollar-yen exchange rate temporarily falling below the 200-day moving average, an important indicator of the long-term uptrend, at around ¥158.
Against this backdrop, the possibility of another approach to ¥164 has been highlighted, with the sustainability of future currency intervention and the direction of US monetary policy emerging as key focuses.