Among the strongest losers of yesterday's USD rally was the Japanese Yen. In order to depress the USD/JPY pair, we need a sustainably weaker Dollar unless the Bank of Japan abandons its dovish stance, economists at Commerzbank report.

Japanese FX interventions cannot permanently depress USD/JPY

“Japanese FX interventions cannot permanently depress USD/JPY. That can probably only be done by a sustainably weaker Dollar or a turnaround in Japanese monetary policy.”

“So for now, Japan's Ministry of Finance must continue to hope for a weaker dollar to limit the upside in USD/JPY. However, since we also see a good chance that the Dollar has reached its high for the time being, the MoF might get around further intervention for the time being.”