USD/JPY has shown a strong bullish trend throughout 2023, with the pair surging more than 14% since January. The rally was further supported by a sharp move higher in U.S. Treasury yields as a result of the Federal Reserve's hawkish policy stance. USD/JPY remained relatively stable during the day, hovering near the 149.00 mark. USD/JPY had a slight correction on Tuesday, when the market speculated that it was due to possible foreign exchange intervention by the Japanese government.
Although Japanese officials have neither confirmed nor refuted market speculation about their involvement in supporting the yen, judging from price trends, it is clear that any artificial intervention will not significantly or permanently change the currency's depreciation trend. Overall, the JPY will remain bearish as long as the wide gap between the Fed and the Bank of Japan on monetary policy persists; this could mean further gains for USD/JPY in the coming weeks.
