💵 The US dollar has regained strength after rumours of another Japanese currency intervention briefly triggered a sharp selloff in USD/JPY. Speculators quickly unwound long dollar positions, but the move proved short-lived as the greenback rebounded.
🇯🇵 Markets remain sceptical that Japan is prepared to intervene again. The previous intervention, which cost around $73 billion, only slowed the dollar’s advance rather than reversing the broader trend, while recent price action suggests authorities stayed on the sidelines.
📊 The biggest driver continues to be the widening gap between US and Japanese monetary policy. With the Federal Reserve expected to keep fighting inflation while the Bank of Japan remains accommodative, investors continue to favour the US dollar over the yen.
🏦 Goldman Sachs has raised its year-end USD/JPY forecast from 155 to 165, citing the growing divergence between the Fed and the Bank of Japan. Expectations that Japanese policymakers could continue supporting low interest rates are adding further pressure on the yen.
⚠️ Although rumours of intervention may continue to create short-term volatility, analysts believe monetary policy differences remain the dominant force, keeping the longer-term outlook supportive for the US dollar.
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