Yen Stabilises, but Intervention Risks Remain

USD/JPY is holding near 156.83 on Friday. Despite heightened volatility in recent sessions, the yen is set to end the week broadly unchanged. Fears of intervention and Tokyo's firm rhetoric have failed to support a sustained strengthening of the currency.

Japanese authorities have stated that they are not constrained by the frequency of their interventions in the foreign exchange market and remain in constant contact with the US. Earlier, the yen rose sharply amid suspected interventions on 30 April and 6 May, but there was no official confirmation of these actions.

Domestic data has been stronger. Real wages rose for the third consecutive month, supporting expectations of further tightening by the Bank of Japan (BoJ).

Nevertheless, the external backdrop remains negative. A stronger dollar and tensions around the Strait of Hormuz continue to weigh on the yen.

Technical Analysis

On the H4 chart, USD/JPY is trading within a consolidation range around 156.50 and is moving higher towards 157.39. A test of this level is likely, followed by a possible pullback to 156.50 before a further move higher towards 157.90. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly upwards, indicating that bullish momentum is building.

On the H1 chart, USD/JPY has reached 156.95 and is now pulling back towards 156.50. A rebound towards 157.00 may follow, with a possible extension to 157.39. The Stochastic oscillator confirms this view, with its signal line below 80 and pointing firmly downwards towards 20, indicating that short-term downside pressure remains.

Conclusion

The yen has stabilised near 156.83 against the dollar, but intervention risks persist despite Tokyo's verbal warnings. Domestic wage growth supports BoJ tightening expectations, yet external factors such as a strong dollar and geopolitical tensions continue to weigh on the currency. Technically, a short-term rise to 157.39 may be followed by a pullback to 156.50 before any further upside develops.

By RoboForex Analytical Department

Disclaimer:

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.