US Treasury $5–10 billion yen purchase: USD/JPY reversal setup in focus

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US Dollar vs Yen up 0.53% today

Highlights

The US and Japan jointly intervened to buy yen after it hit its weakest level versus the dollar since 1986.
Participation by the US Treasury and use of the Fed's repo facility underscored a coordinated and sizable policy response.
Technical signals remain bearish with price trading below major averages; projected range is ¥155.13 to ¥158.99 with 74% probability of further downside.

Yen intervention triggers as rate gap narrows and officials respond

On August 2, 2026, the United States and Japan executed a coordinated intervention to purchase Japanese yen after the currency reached its weakest level against the US dollar since 1986, a move officially confirmed by both governments. The swift action utilized potential access to the Federal Reserve's repo facility, providing dollar liquidity for the operation and facilitating execution, according to Reuters, CNBC, and Exchangerates Org. US Treasury Secretary Scott Bessent's participation in a planned $5–10 billion yen buy signaled a robust policy response, while expectations of a narrowing rate differential between the two countries contributed further context to the intervention's timing.

Technical weakness persists as bearish momentum dominates key levels

USD/JPY faces resistance at the Ichimoku Kijun on the daily chart at ¥157.94, while support is established near ¥155.13. The pair is trading below the MA-20, MA-50, and MA-200, indicating that sellers remain in control across all monitored timeframes. Momentum indicators reflect ongoing weakness: MACD is in strong sell mode, ADX signals further downside, RSI sits at 36.76 with a Sell bias, and CCI is also in Sell territory. Stochastic RSI is Neutral, suggesting the pair is not yet oversold, whereas Bull/Bear Power points to clear intraday seller dominance. Price action remains divergent from underlying oscillators, as intraday gains have occurred without any accompanying momentum reversal.

Downside risk prevails as pair stays trapped in volatility range

Over the next two to three trading days, USD/JPY is projected to fluctuate within a typical volatility band of ¥155.13 to ¥158.99. The probability for a sustained upward move is 26%, while a downward move is more likely at 74%. The base scenario expects the pair to remain rangebound within these levels. A clear bullish signal would require a break above the ¥157.94 resistance, while a decisive move and hold below ¥155.13 would activate a bearish scenario and likely further declines.

Anton Kharitonov, Traders Union expert, notes that the recent US-Japan coordinated intervention halted the yen's historic slide but failed to spark lasting bullish momentum. With USD/JPY still trading below its key moving averages and momentum indicators showing persistent weakness, he remains cautious. Sellers continue to control the pair unless ¥157.94 is reclaimed. "Until there is a decisive push above ¥157.94, the technical backdrop stays bearish and I do not expect a durable trend reversal."

Previously it was reported that the United States and Japan undertook a rare coordinated intervention to strengthen the yen and counter disorderly moves in the currency market. With USD/JPY still exhibiting strong seller dominance below its major moving averages, traders should monitor for a potential escalation in intervention or policy shifts if the pair decisively breaches the ¥155.13 support level in the coming sessions.

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.