USD/JPY: Yen Tumbles Beyond ¥152 to Dollar, Marking a 34-Year Low. Intervention Soon?

Japanese yen hit its lowest level to the dollar since 1990 after the Bank of Japan failed to boost its currency.

Key Points:

• Yen sinks to 34-year low.
• Officials ready to defend it.
• Japan could spend up to $80B.
• The USDJPY pair is once again the target of relentless bullish attacks aiming to extremely weaken the Japanese yen. Earlier on Wednesday, the dollar-yen touched ¥152.00 — a 34-year low for yen, following the Bank of Japan’s rate hike from last week. Back in 1990, the Japanese currency floated as low as ¥159 to the dollar. All that weakness isn’t good for Japan and officials have vowed to step in.
• Finance minister Shunichi Suzuki said today that the government “would not rule out any steps against any excessive moves.” In other words, it won’t hesitate to shore up the yen by buying boatloads of it while selling the US dollar. Some analysts predict that Japan could spend as much as ¥12 trillion ($80 billion) to strengthen its currency.
• Here’s the tricky part. If Japan wades in at ¥152, it would signal to markets that this is the line in the sand, prompting forex speculators to ramp up their bets and challenge that. Still, with each and every pip above that threshold, the probability of intervention rises significantly. Previously, Japan moved in to support the yen in October and November 2022.