Can USD/JPY hold support as Japan yen-buying intervention pressures the pair?

Traders Union
All News
Currency
US Dollar vs Yen drops 0.68% today

Highlights

Japan's foreign reserves dropped by $79.6 billion in August 2026 to $1.208 trillion as authorities carried out $98.6 billion in yen-buying intervention.
The intervention was mainly funded through the sale of U.S. Treasuries, cutting Japan's foreign securities holdings by $87.8 billion, which represent about 70% of reserves.
USD/JPY remains under strong seller pressure with all major indicators bearish and the expected trading range for the next two to three sessions is ¥153.85 to ¥156.13.

Yen-buying intervention and reserve fall drive continued supply pressure

Japan’s foreign reserves fell by $79.6 billion in August 2026 to $1.208 trillion after authorities conducted $98.6 billion in yen-buying foreign exchange intervention. According to Time, the intervention was largely funded by selling U.S. Treasuries, resulting in an $87.8 billion reduction in Japan’s foreign securities holdings, which make up about 70% of its reserves. This large-scale intervention was aimed at supporting the yen by increasing demand in the FX market, though price action has remained under broader selling pressure.

Sustained downside as momentum aligns with technical resistance

On the hourly chart, USD/JPY is trading below the MA-20, MA-50, and long-term MA-200. The Ichimoku Kijun sits at ¥156.11, establishing a clear resistance level. Key technical indicators continue to flag strong downside control: MACD and ADX both signal momentum with sellers in command, while Bull/Bear Power confirms downward intraday dominance. RSI, Stoch RSI, and CCI all indicate oversold status, and the Awesome Oscillator remains aligned with the prevailing bearish pressure. Price is anchored near the session low, with a small downward gap and subdued volatility, suggesting limited intraday rebound potential.

Range-bound volatility as bearish bias limits rebound prospects

Over the next two to three sessions, USD/JPY is likely to consolidate within a band of ¥153.85 to ¥156.13, consistent with typical volatility patterns around current levels. Upside remains highly improbable without a clean break above immediate resistance at ¥156.11. Alternatively, any move below key support at ¥153.85 could trigger further downside momentum. The baseline scenario calls for choppy or sideways trading as the bearish tone remains dominant.

Anton Kharitonov, expert at Traders Union, sees persistent bearish pressure on USD/JPY, with technicals confirming sellers remain in control. He notes that Japan’s aggressive FX intervention has not shifted momentum, as price stays below key moving averages and support levels. Kharitonov remains cautious due to continued downside signals across multiple indicators. "Until we see a decisive break above ¥156.11 or a shift in intervention efficacy, I expect the yen to stay defensive and USD/JPY to face further downside risk."

Earlier, analysts noted that expectations for tighter Bank of Japan policy were a key driver behind the bearish trend in USD/JPY. The latest intervention-driven decline in Japan’s foreign reserves reinforces downside risk, with any sustained move below ¥153.85 likely to prompt renewed selling momentum in the near term.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.