The recent fluctuations in the Japanese yen exchange rate are really worth paying attention to. Last week, Japanese authorities once again intervened in the foreign exchange market, and this time the move was significant, causing the market to react with a sharp drop in USD/JPY. Honestly, this is already the second obvious intervention by Japan in the past two years; the last time was at the beginning of the month, when it fell nearly 3% at one point.

Looking at the data, Japan's official intervention this time is suspected to have put 5.4 trillion yen into stabilizing the exchange rate, a considerable scale. Goldman Sachs analysts calculated that, based on this consumption rate, Japan's foreign exchange reserves could theoretically support about 30 such interventions. But the problem is, the authorities will definitely be cautious and won't spend money endlessly, so they are likely waiting for a more critical opportunity to act.

Interestingly, the 157 level now seems to be a new line of defense. If the yen continues to weaken, will this line be defended again? I think it depends on several factors. First, the fundamental reason for the yen's weakness is still the interest rate differential: high U.S. interest rates, low Japanese interest rates, and funds naturally flowing to the U.S. Second, the ongoing Middle East tensions and high crude oil prices directly increase Japan's import costs, expanding the trade deficit, and more funds are shorting the yen.

I agree with Nomura Research Institute's analysis: foreign exchange intervention, in essence, is about buying time. Unless the crude oil market stabilizes, it will be difficult to fundamentally solve the yen's depreciation problem. Their forecast is that if structural issues are not addressed, the yen could depreciate again to 160 or even lower. ING Bank's view is similar, believing that the fundamentals continue to suppress the yen, and official interventions can only maintain their effect for a few months at most.

Ultimately, unless there are clear signs of easing in the US-Iran situation, the yen's exchange rate will be hard to sustain a lasting rebound. In the short term, whether 157 can hold remains to be seen, but from a medium-term perspective, the pressure on the yen is still quite significant. This exchange rate trend is indeed worth ongoing attention.