Yen Ebbs As Traders On Alert to Intervention. Forecast as of 24.11.2025 | LiteFinance
Both the United States and Japan want to see USD/JPY quotes declining. A weak dollar will increase the competitiveness of American companies. A stronger yen will slow down inflation. Let’s discuss these topics and make a trading plan for the USD/JPY pair.
The article covers the following subjects:
Major Takeaways
- Japan and the US have signed a currency agreement.
- Interventions depend on the speed of fluctuations in the USD/JPY.
- The yen is undervalued relative to bond yields.
- Short trades on the USD/JPY pair can be considered below 156.8.
Weekly Fundamental Forecast for Yen
Investors have long wondered whether Donald Trump wants to see a weak US dollar. The US president’s pressure on the Fed to lower interest rates suggested a policy of a weak greenback to increase the competitiveness of American companies and bring manufacturing back to the United States. However, there were no clear signs of this happening. However, they have now surfaced, and in the most unexpected way.
According to Japanese Finance Minister Satsuki Katayama, the Japanese government will consider currency intervention, as this was agreed with the US. A while ago, she discussed the matter with Scott Bessent. Investors argued about whether Washington would force Tokyo to intervene in the Forex market. At the time, no answer was given. However, everything that is kept in the dark eventually comes to light.
The puzzle has been solved. Donald Trump wants to weaken the US dollar and is even prepared to go down the path of coordinated currency interventions similar to the Plaza Accord in 1985. Japan is concerned that the yen’s devaluation will spur inflation, which has already exceeded the 2% target for 43 consecutive months.
Interventions Amid Rapid Japanese Yen Depreciations
Source: Bloomberg.
Some investors believe that a rally in USD/JPY quotes to 160 will trigger intervention, as the Japanese government has previously entered the market near this level. Others recall the Tokyo manual published in 2024. It stated that a ¥10 strengthening of the dollar over the course of a month would require currency intervention. Judging by the indicator of the rate of yen depreciation, this is indeed the case.
Notably, in previous years, Japan chose a very appropriate time to sell the USD/JPY pair due to signals that the Fed’s monetary tightening cycle was coming to an end or hints of an overnight rate hike by the Bank of Japan. This time, intervention in the Forex market may not be necessary at all. The Fed does not rule out continuing the cycle of monetary expansion in December, and Sanae Takaichi has finally announced the scale of fiscal stimulus. It will amount to ¥17.7 trillion and will be the largest since the pandemic.
USDJPY Performance and US-Japan Yield Gap
Source: Bloomberg.
The market bought the USD/JPY pair on rumors and sold on the news. At the same time, profit-taking on long positions could turn into a serious correction and reverse the uptrend. The US administration wants to see a weak dollar, the Fed is set to cut interest rates, and the bond yield spread signals that the yen is oversold.
Weekly USDJPY Trading Plan
Forex traders understand that both Washington and Tokyo want to drag the USD/JPY pair down. If the pair fails to stay above 156.8, it will offer a sell signal. However, if it surges above 157.9, Japan will intervene. In this case, short positions on upward pullbacks can be considered.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of USDJPY in real time mode
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