【Dollar Yen】Voluntary intervention causes 1 yen drop → fully recovers | The reasons still favor shorts
Yesterday's USD/JPY moved down almost 1 yen in a scripted verbal intervention.
But in the end, it fully retraced. It has risen back toward around 157.6.
The force of yen selling is strong. Even with intervention, it returns. This is the reality of the current market.
Limits of Verbal Intervention
Verbal intervention is "only words." It is not accompanied by real ammunition.
The market sees through that. For the first one or two times it works. But after repeated attempts, people get used to it and think "here we go again." When it falls, there are buyers on dips who push it back up.
This time is exactly the same pattern. It fell 1 yen and retraced in a few hours. Verbal intervention alone cannot create a yen-weakening trend, which has been proven again.
Reasons Still Favoring Shorts
"If it retraced, why not go long?"
You may think that. In the short term, yes. As long as yen selling remains strong, there are opportunities for short-term longs.
But my base case is still favorable to shorts. I’ll explain why on a monthly chart.
Look at the monthly chart.
From the 75-yen range to the 160-yen range, it has risen over about 10 years. It has touched 160 yen three times, and each time it was repelled.
I’ve said this shape many times: it is a triple top.
If a monthly-level triple top completes, the downside won’t be just a few yen. A pullback of 10 yen or 20 yen wouldn’t be surprising.
Belief in Years of Intuition
I’ve watched USD/JPY for 12 years.
The chart’s "shape" is giving a bad feeling. The upper wick on the monthly chart, the rebound at 160 yen, and the timing when intervention began—these have coincided with large pullbacks many times in the past.
It’s not just technical reasons. After 12 years of watching charts, a senseof “it’s almost here”is telling me.
Of course I won’t trade on just a hunch. But the intuition cultivated from years of experience picks up something that data doesn’t show. I have paid a painful price many times for ignoring this intuition.
Current Approach
Base stance is shorts favored.
However, in the current environment where yen selling is strong, blindly shorting is dangerous.
・Short after drawing closer to the 157 yen late- to 158 yen range
・Short-term longs can be taken, but don’t chase aggressively
・Don’t jump on a sharp drop from verbal intervention. Wait for a rebound
・If real-money intervention comes in, follow in the direction honestly
"Strong yen-selling does not mean going long is the right answer." In a strong yen-selling environment, think about where to place shorts.
This is not contrarian betting. It is selling on rallies within a larger trend.
Summary
・Verbal intervention caused a 1 yen drop but fully retraced. Yen selling remains strong
・But on a monthly chart, the triple-top shape remains intact
・The fact that it hasn’t broken through after testing 160 yen three times weighs heavily
・From 12 years of experience, I feel a major pullback is coming
・Base stance is shorts-favored in their approach
・However, while yen selling remains strong, wait for a drawdown before selling
When verbal intervention no longer works, what comes next is real-money intervention. That will be the true turning point.
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