USD/JPY bounces back after supposed intervention effort by Tokyo yesterday

Tokyo reportedly intervened to defend the yen after USD/JPY fell sharply, but the effect appears short-lived. The pair initially dropped from about 160.50 to 159.30 and then to 158.00 before tumbling to 155.55 (a near 400-pip move) over slightly more than an hour. Despite the intervention, USD/JPY has bounced back above 157.00 as market forces — surging oil, cost-push inflation, BOJ rate dynamics and Middle East disruptions (Strait of Hormuz) — continue to favor the dollar. The piece questions how much FX reserves Tokyo will expend, noting past interventions were erased within months, and suggests any intervention may only buy time unless fundamentals shift. Market impact: intervention softened the move briefly but did not halt a renewed dollar advance.