Deep tide TechFlow message: With the Bank of Japan decision scheduled to be announced on September 03, Japanese yen traders are highly alert to the possibility that Japanese authorities may intervene again in the FX market. Since a three-day holiday period will immediately follow the BOJ’s announcement of its decision, market participants believe the authorities could take action during the low-liquidity window of the holiday. The yen continued its gains from Wednesday into Thursday, highlighting the market’s heightened anxiety ahead of the BOJ policy meeting on September 18. Market expectations are broadly that the BOJ will raise interest rates at this meeting. Earlier this April, authorities waited until Japan’s long holiday to carry out the first intervention since 2024.

Nowadays, investors are speculating that Japan may adopt a similar strategy during the “Silver Week” holiday period, which may begin shortly after the conclusion of the Bank of Japan’s policy meeting. Samara Hamoud, a strategist at the Commonwealth Bank of Australia, said: “‘Silver Week’ could further increase uncertainty in the yen’s price action, mainly because market liquidity may decline further during the holiday. As time goes on, the USD/JPY exchange rate may once again test the previous high level that had triggered intervention. If this happens quickly—especially if it occurs again around the time of the Bank of Japan meeting—the risk of further intervention will rise significantly.” (Jin Shi)