Traders on Alert for Intervention Risks Ahead of BOJ Decision, Silver Week May Become Action Window

On September 3, with the Bank of Japan's decision imminent, yen traders are highly alert to the possibility of intervention by Japanese authorities in the foreign exchange market. Following the BOJ's announcement, a three-day holiday will commence, leading market participants to believe that authorities may take action during this period. The yen continued its upward trend on Thursday, highlighting the tension ahead of the BOJ's policy meeting on September 18, where a rate hike is widely anticipated. In April of this year, Japanese authorities conducted their first intervention since 2024 during a long holiday, prompting speculation that similar strategies may be employed during the upcoming Silver Week holiday, which starts shortly after the policy meeting. Samara Hamoud, a strategist at the Commonwealth Bank of Australia, noted that Silver Week could increase uncertainty in yen movements, as market liquidity may decline during the holiday, potentially causing the USD/JPY exchange rate to test previous intervention-triggering highs again. If this situation occurs rapidly, especially around the BOJ meeting, the risk of further intervention will significantly rise.

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