Experts Agree: Yen Cannot Escape Lows on Intervention Alone

In thin Monday trading, USD/JPY traded around 159.08038, extending its rebound from last week's low near 158.00 and approaching the key psychological level of 160.00 again. The pair quickly recovered losses after a brief pullback, indicating that the market's deterrence from joint US-Japan intervention has clearly weakened, and official market action alone can hardly reverse the yen's downtrend.

**Intervention Effect Short-Lived**

According to market sources, the US and Japan previously intervened in the FX market jointly on a rare basis, briefly pushing USD/JPY from around 164 down to 157, a short-term appreciation of about 4%. However, this effect only provided temporary relief and has now largely faded. Analysts point out that intervention can only smooth volatility, not change the underlying trend, and without supportive tightening measures such as rate hikes, the yen will find it hard to escape its weak position near multi-year lows.

**Structural Headwinds Remain Unresolved**

Japan's prolonged ultra-loose monetary policy, with a zero-interest-rate environment compounded by economic stagnation and deflationary pressures, continues to weigh on the yen. Meanwhile, carry trades remain prevalent, with investors borrowing low-yielding yen to invest in higher-yielding assets, further intensifying depreciation momentum. The market warns that unless the Bank of Japan signals clear tightening, any intervention will struggle to fundamentally support a significant yen rebound.