USD/JPY has turned sharply lower in the past couple of trading sessions and is now four big figures lower at the 156 handle. After flagging a month ago that the latest round of intervention on the pair should be faded, this did play out. However, the events of the past few days lead us to conclude that Japanese authorities are becoming increasingly conflicted.
Pressure from Bessent, pressure from PM Takaichi, and pressure from the domestic economy are pulling Ueda and his colleagues in different directions on monetary policy actions.
This leads us to conclude that, for the moment, the outlook for the Yen is a complete mess and should be treated cautiously to avoid unnecessary losses from trading the pair.