For now, the market dynamics are broadly following those from 22 September 2022, when Japanese authorities intervened with around $20bn to support the yen. Back then, the USD/JPY initial drop was around 3.5%, followed by a rebound worth around half of the initial move. Shortly after, the pair briefly dropped again below the initial low and rebounded again. At the end of the session, USD/JPY was trading 2.3-2.5% below its pre-intervention level. If we followed the same script this time, USD/JPY would end up trading around 156.50 by the end of today. Markets will be monitoring any further comments from Japanese officials very closely at this point. First, to have some confirmation that they have intervened, but crucially to hear whether they signal this will be an “intervention campaign” as opposed to a one-off move. The tendency to sell the rally and re-test the officials’ tolerance is something we have seen in other FX intervention instances across the FX market – although the September 2022 experience suggests markets may be reluctant to push it too close to 160.0 again. This is also a week full of US events: a hawkish Fed and strong US data would put significant fresh pressure on the yen.