Anna 
At the onset of the new week, USD/JPY is experiencing a slight decline, hovering in the 151.300s, signaling a decrease of nearly a tenth of a percent. This downturn follows remarks from Masato Kanda, Japan’s currency chief, which have intensified speculation that Japanese authorities may intervene in the market to bolster the Yen.
Kanda, serving as the vice-finance minister for international affairs, addressed concerns regarding the Yen’s weakness, which persists at historic lows even after the Bank of Japan’s unprecedented decision to raise interest rates for the first time since 2007 during their policy meeting last Tuesday. This unexpected move contradicts the typical impact of higher interest rates, which generally strengthen currencies.
Expressing his views to reporters on Monday, Kanda stated, “The current weakening of the Yen is not in line with fundamentals and is clearly driven by speculation. We will take appropriate action against excessive fluctuations, without ruling out any options,” as reported by the Japan Times. When queried about the possibility of direct intervention or Yen-buying in the open market, Kanda affirmed, “We are always prepared.”
USD/JPY has surpassed the crucial level of 150.000, historically prompting intervention from the Bank of Japan, as observed in 2022 when the currency reached 151.950 against the US Dollar.
Data from the currency futures market aligns with Kanda’s assertion, indicating that speculators, including hedge funds, increased their bearish (short) bets on the Yen during the week of the Bank of Japan’s March meeting, despite widespread anticipation of a rate hike.
From a technical standpoint, the USD/JPY chart reveals a bearish Hanging Man Japanese candlestick pattern, suggesting a potential short-term reversal and pullback. The formation of this pattern, coupled with Friday’s red candlestick, bolsters the likelihood of further downside movement.
While Japanese candlesticks are indicative of short-term reversals, any continuation of the pullback might target support at the 50-day Simple Moving Average (SMA) positioned at 149.123. Conversely, a clear break above 152.000 would signal ongoing bullish sentiment, potentially indicating the Bank of Japan’s reluctance or inability to intervene effectively. However, sustained upward movement may face resistance, with a potential target at the next psychological level of 153.000.
