If you weren’t looking at your chart today, I would not blame you for missing this event from earlier. USD/JPY saw a quick dump from 157.20 to 155.69 in less than ten minutes as it appears to be another potential intervention play by Tokyo officials. The move seems consistent with the action that we’ve been seeing on Thursday and Friday at least.

So far, there’s only reports likely confirming that there was intervention on Thursday. A supposed $35 billion was spent in doing so, which would be the most since April 2024. But as we are still awaiting official confirmation, working with spot data flows from the BOJ is the best one can do at the moment.

Japanese markets were closed today and that led to thinner liquidity conditions. Typically, that is not always the best time to go about doing intervention business. However, I reckon Japan wants to try some alternatives after having been deflected last week. This time around though, we’re seeing USD/JPY bounce back from almost similar levels and back to near where it was before.

It might sound counter-intuitive to not want to act during low liquidity periods, but there’s a certain nuance to it.

The main thing about intervention isn’t so much so as the money but more so about the signaling. You want enough players in the market to get that signal and amplify it, so as to get the idea that “we shouldn’t mess with the MOF/BOJ”. Otherwise, that signal can get lost in translation if there isn’t enough liquidity follow through.

And at the end of the day, it might just be passed off as more noise than an actual leading signal to traders. I talked about some of this last week here.