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Japanese Yen: Intervention talk and BoJ signals – Rabobank

FXStreetJul 1, 2026 12:16 PM
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Rabobank’s Jane Foley Senior FX Strategist discusses speculation that Japan’s Ministry of Finance could intervene in favour of the Japanese Yen as USD/JPY trades near levels last seen in 1986. Foley argues that FX intervention alone may not shift negative sentiment and that stronger Bank of Japan rate hike signals are likely needed. Rabobank now forecasts USD/JPY at 159 over three months, assuming a more hawkish BoJ stance and recent adjustments in favour of the Dollar.

Yen intervention risks and BoJ path

"There is so much speculation that the MoF may take advantage of thinned holiday conditions on Friday to intervene in favour of the JPY, that the bigger surprise may be if no action is taken."

"Looking ahead, while further MoF FX intervention in favour of the JPY may seem inevitable, this is likely to be insufficient on its own to change the market’s negative psychology towards the currency."

"In our view, the BoJ may have to signal it is prepared to accelerate the pace of rate hikes before the JPY finds decent support in order to break the market’s attachment to the JPY as a funding currency for carry trades."

"Steady rates are widely expected at the BoJ’s July 31 policy meeting."

"Our forecast of a move back to USD/JPY159 on a 3-month view (up from a previous forecast of 158) assumes a hawkish BoJ."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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