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USD/JPY Whipsaws Then Slumps on Official FX Intervention Reports

USD/JPY Whipsaws Then Slumps on Official FX Intervention Reports

Nick Cawley, Senior Strategist

US Dollar Price and Chart Analysis

  • USD/JPY trades in a 350 pip range in less than one hour.
  • BoJ is seen buying Japanese Yen for US dollars.
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The Japanese Yen is highly volatile in European trade as the market reacts to rumors then confirmation that the Bank of Japan (BoJ) has intervened in the FX market, buying Yen for US dollars. If reports are true, and the market seems to suggest this, this is the first time the BoJ has intervened in the market since June 1998.

Bank of Japan (BoJ) – Foreign Exchange Market Intervention

Earlier today, the Japanese central bank kept interest rates unchanged at its latest policy meeting, as expected. BoJ governor said that the central bank would not change its ultra-loose monetary policy ‘for the time being’, adding that the BoJ would not be raising interest rates ‘for some time’. While the central bank is set to keep rates lower (in negative territory) for longer, it seems that they are sufficiently worried about the Yen’s weakness to try and shore up the ailing currency. It may be that USD/JPY 145.00 is an unofficial line in the sand for the central bank. Earlier today the latest BoJ monetary policy decision gave no hint of any official FX intervention, adding to the current volatility.

Japanese Yen Spikes Lower as the BoJ Holds Back FX Intervention Threat

USD/JPY has traded in a 350 pip range in Europe so far, more than twice its normal trading range using the 14-day ATR indicator. What has been a one-way trade for the past months – USDJPY higher – now looks to have been stopped in its tracks as the BoJ tries to wrestle back control of its currency.

USD/JPY 5 Minute Price Chart – September 22, 2022

For all market moving data releases and economic events see the real-time DailyFX Calendar.

Retail trader data show27.43% of traders are net-long with the ratio of traders short to long at 2.65 to 1. The number of traders net-long is 15.22% lower than yesterday and 6.16% lower from last week, while the number of traders net-short is 3.46% lower than yesterday and 2.16% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/JPY-bullish contrarian trading bias.

Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -10% -1% -4%
Weekly 3% -7% -4%
What does it mean for price action?
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What is your view on the USD/JPY – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.