[MARKET UPDATE] USD/JPY prints fresh incremental session lows of 153.31 having fallen back under its 100 DMA (153.54)

• JPY is the standout gainer, bolstered by double intervention risk after Japanese PM Takaichi warned that the government is ready to take action against speculative moves amid a weakening currency and surge in bond yields, while it was reported on Friday that the New York Fed had conducted rate checks on USD/JPY. Analysts at ING succinctly highlight two reasons for Washington's involvement: "a) the weak yen was adding to last week's JGB sell-off and indirectly driving US Treasury yields higher. If there is any financial instrument more important than the stock market to the White House right now, it is US Treasuries. And b) the strong USD/JPY was potentially unwinding the work of US tariffs on Japan and giving Japanese manufacturers a competitive advantage."

The recent drop in USD/JPY, now under its 100 DMA, signals significant market shifts, particularly with the yen gaining traction amid intervention risks. The Japanese government's readiness to act against speculative moves underscores concerns over currency stability, while Washington's interest in the weak yen highlights its potential impact on US Treasury yields and trade balances. This could lead to heightened volatility in forex markets as traders reassess the USD/JPY outlook based on these geopolitical and economic factors.