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Published: 3 August 2026,06:23
Daily Market Analysis New
Key Takeaways:
*Japanese yen rallies sharply after Japan confirms coordinated action with the U.S. Treasury
*USD/JPY drops aggressively as markets price in renewed intervention risk
*Tokyo signals it is ready to act again if currency volatility remains excessive
The Japanese yen surged sharply during early Asian trading hours, extending last week’s rebound after Japan confirmed that it had conducted a coordinated yen-buying operation with the U.S. Treasury. The move triggered aggressive selling in USD/JPY, as traders quickly adjusted positions amid rising concerns that further intervention could follow.
Japan’s Finance Ministry said the operation was carried out on July 31, U.S. time, in response to sharp and disorderly moves in the yen. The confirmation was significant because joint intervention between Japan and the United States is rare, making the latest action a strong signal that both governments are increasingly concerned about excessive currency volatility.
Tokyo also warned that it is prepared to take further action if needed. Finance Minister Satsuki Katayama said Japan remains in close communication with the U.S. Treasury and will not hesitate to act again if market conditions require it. This kept traders on high alert during Asian trading, with yen volatility rising sharply as markets priced in the possibility of another round of intervention.
Support from Washington further strengthened the yen’s rebound. President Donald Trump described the move as “a signal of friendship,” while Treasury Secretary Scott Bessent said the United States stepped in to help counter disorderly yen movements and remains ready to support Japan if necessary.
The intervention news also weighed on the broader U.S. dollar. Since yen-buying intervention typically involves selling dollars to purchase yen, expectations of further coordinated action pressured the Dollar Index and increased caution toward long-dollar positions.
Overall, the yen’s sharp recovery reflects a major shift in market positioning after confirmation of U.S.–Japan cooperation. Moving forward, USD/JPY is likely to remain highly sensitive to official comments from Tokyo and Washington, especially if authorities continue to signal readiness for further action.
Technical Analysis
USD/JPY, H4:
USD/JPY is trading lower, currently testing the 155.45 support level, which acts as a key near-term downside pivot.
Momentum remains strongly bearish, with the MACD showing increasing bearish momentum and the RSI at 22 staying below the midline and in oversold territory, suggesting that selling pressure remains dominant.
A confirmed breakdown below 155.45 could extend losses toward the next support level at 152.00, reinforcing the bearish structure.
However, if bearish momentum begins to fade, the pair may stage a technical rebound and retest the 160.65 resistance level, followed by 163.65 if recovery momentum strengthens.
Resistance Levels: 160.65, 163.65
Support Levels: 155.45, 152.00
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