Dollar Rebounds as BOJ Intervention Fears Fade

USD/JPY rose modestly as the second full week of May trading commenced, with markets settling down after last week’s sharp volatility surrounding suspected Japanese intervention efforts. With no fresh signs of official action from Tokyo, traders refocused on the underlying macro backdrop, where higher U.S. Treasury yields (thanks to the latest rally in oil) and relatively resilient U.S. economic data helped stabilize the greenback. With intervention fears at the margin and the Federal Reserve still maintaining a relatively firm stance, USD/JPY continues to reflect the broader divergence between U.S. and Japanese rate expectations, with 160.00 acting a ceiling of sorts before intervention fears become legitimized anew. 

USD/JPY Daily Price History

In the above chart, USD/JPY continues to cling to the uptrend from the April 2025, October 2025, and February 2026 swing lows following the confirmed intervention on April 30. Momentum is losing its bearish luster, with MACD’s waning slide below its signal line countered by Slow Stochastics’ shift towards overbought territory. While it remains the case that “a loss of the aforementioned uptrend would suggest a major top in place for USD/JPY,” the backdrop of elevated energy prices and Treasury yields makes for a difficult case for a sustained move to the downside. 

Trading forex requires an account with a forex provider like tastyfx. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them.