The yen remains supported following joint action by Japan and the United States in the foreign exchange market, which demonstrated the authorities’ readiness to counter excessive weakness in the Japanese currency. Although the effectiveness of intervention usually depends on subsequent monetary policy developments, the risk of further action limits demand for buying the dollar against the yen during the current session.

The fundamental case for yen appreciation has become more pronounced. Real wages in Japan increased for a sixth consecutive month, while the minutes of the Bank of Japan’s June meeting showed greater attention to inflation risks. The market is also considering the possibility of another rate increase in September or October, which is gradually reducing the dollar’s advantage arising from the interest rate differential.

Support for the dollar has not disappeared entirely. The US economy continues to expand, while resilient services data leave the Federal Reserve room to maintain a restrictive stance. However, weaker private-sector job growth and lower yields limit this factor, while the risk of further official action remains a specific advantage for the yen. As a result, the baseline scenario points to a further decline in USDJPY if current expectations for the Bank of Japan remain unchanged.

Trading idea: SELL 157.700, SL 158.150, TP 156.550