Multiple rounds of suspected intervention have brought the stalemate to a standstill! The 155 barrier remains unbroken after prolonged attacks, casting a shadow over the yen appreciation market.

After multiple suspected interventions by the Japanese government, the exchange rate of the Japanese yen against the US dollar has consistently failed to break through the 155 level, causing the market to question the sustainability of the current yen appreciation trend. Since April 30th, the Japanese yen has experienced several significant rebounds, but each time the rally weakened before reaching the 155 level, followed by a partial pullback. Despite the Japanese authorities having sufficient foreign exchange reserves to continue intervening in the market, the exchange rate trend indicates that the market demand for the US dollar remains strong, limiting the ability of the Japanese government to reverse the yen's weakness. The current macroeconomic fundamentals continue to support a strong US dollar. Even though the market expects tensions in Iran to ease, energy prices remain high. The Bank of Japan is at least a month away from a potential interest rate hike, and there is no sign of the Federal Reserve starting a rate-cutting cycle. Moh Siong Sim, a strategist at OCBC Bank, said, "The key issue is whether the Japanese Ministry of Finance will continue to defend the yen exchange rate or if they have already used enough ammunition to intervene." The strategist pointed out that intervening alone is unlikely to reverse the overall trend of yen depreciation. The yen against the dollar encountered strong resistance near the 155 level Although official confirmation of any intervention action has not been made, sources revealed that the Japanese government intervened in the market on April 30th when the yen exchange rate fell below the important psychological level of 160 yen per US dollar. According to an analysis of the Bank of Japan's accounts, this intervention cost approximately $34.5 billion. Traders said that on May 1st, May 4th, and May 6th, the yen exchange rate experienced sudden movements, indicating characteristics of the Bank of Japan buying the yen. Ikue Saito, a strategist at JPMorgan, commented, "The strategy of defending the 160 level of the dollar against the yen is actually flawed and is prone to causing a concentrated market shock." In 2024, after the yen exchange rate fell to around 160.17, the Japanese government spent approximately $10 billion purchasing the yen multiple times. When the yen exchange rate fell to 157.99, 161.76, and 159.45, the Japanese government took further measures. This time, an intervention occurred for the first time when the dollar against the yen exchange rate touched 160.72, and subsequent suspected intervention actions pushed the rate to a 10-week low of 155.04 on Wednesday, followed by a rebound. During the Thursday afternoon trading session in Asia, the exchange rate hovered around 156.34. Analysts at Goldman Sachs said that Japan still has ample financial resources to carry out such interventions again, and based on the scale of last week, the number of interventions could reach as many as 30 times. Atsushi Mimura, a senior official of Japan's monetary policy, stated on Thursday that Japan is fully prepared to deal with speculative activities in the foreign exchange market. He also mentioned that the rules of the International Monetary Fund (IMF) do not restrict the frequency of interventions by authorities in the foreign exchange market. However, Masahiko Loo, a senior fixed income strategist at DWS Investment Management, said that the effectiveness of intervention measures is clearly diminishing, "as the market increasingly sees this intervention as passive defense at key levels." He added, "If the Bank of Japan cannot correct its lagging monetary policy stance through consecutive rate hikes, the yen may continue to weaken in the short term."