USD/JPY plunged 2.25% on Thursday after a violent intraday reversal that wiped roughly 500 pips off the pair in just a few hours. Price spiked to a multi-month high near 160.75 in early London trade before collapsing sharply to test 155.55, with the daily candle leaving a long upper wick and a body close to the lows around 156.65. The peak-to-trough swing of 3.22% marked the sharpest one-day fall in over three years and abruptly capped the steady advance that had carried the pair from the mid-150s through April.
The trigger was a coordinated escalation from Tokyo. Finance Minister Satsuki Katayama warned earlier in the day that authorities were "nearing the time to take bold action" on FX, with Vice Finance Minister Atsushi Mimura following up with what he framed as a "final advisory" to Yen bears. The Nikkei subsequently reported, citing a government source, that the Ministry of Finance (MoF) and the Bank of Japan (BoJ) had carried out direct Yen-buying, Dollar-selling intervention, the first reported action of its kind since the 2024 episode that ultimately consumed roughly $62 billion. Whether the move sticks is the open question; the Federal Reserve (Fed) sits at 3.50% to 3.75% against a BoJ policy rate of 0.75%, and the carry-trade incentive that has fueled Yen weakness all year is structurally untouched by a single day of official selling.
The Japanese data slate next week is unusually thin. Tokyo Consumer Price Index (CPI) hits the wires after the Thursday close, then three back-to-back market holidays (Constitution Day on Saturday, Greenery Day on Sunday, and Children's Day on Monday) compress liquidity through the early part of the week. Wednesday's Labor Cash Earnings and the BoJ Monetary Policy Meeting Minutes are the only scheduled domestic risk events of note. That leaves USD/JPY hostage to two external forces: any follow-through MoF action that forces a deeper short-Yen unwind, and a heavy US data run anchored by Friday's Non-Farm Payrolls (NFP) print, which will set the near-term tone for Fed expectations.
USD/JPY 1-hour chart
Technical Analysis
In the one-hour chart, USD/JPY trades at 156.66, preserving a bearish near-term bias after extending the retreat from the 160.30 day open. The slide from recent highs keeps the pair under pressure, while the Stochastic RSI recovering from oversold territory toward the high-20s hints that downside momentum is easing rather than accelerating.
On the topside, the day’s open at 160.30 stands as the first meaningful resistance to any corrective rebound, with the broader bearish structure likely to cap advances while price holds well below that barrier. On the downside, the absence of nearby indicator-based supports leaves the pair vulnerable to further weakness, with traders watching price action alone for signs of stabilization or a short-term base forming.
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