USD/JPY Drops as Japan Launches 2026 FX Intervention Campaign

USD/JPY has come under significant selling pressure as reports confirm Japan's Ministry of Finance has initiated its 2026 foreign exchange intervention campaign to defend the yen. The move signals Tokyo's growing discomfort with yen weakness, which had pushed USD/JPY toward multi-decade highs in recent sessions. The intervention appears coordinated with verbal warnings from Japanese officials, adding credibility to the campaign's sustainability. EUR/USD and EUR/GBP are also seeing notable moves as the broader dollar complex adjusts to the intervention headlines, with the US Dollar Index Futures declining sharply. The Bank of Japan's ongoing policy normalization efforts provide a fundamental backdrop supporting yen strength, while the intervention adds a powerful near-term catalyst. Traders should exercise caution around USD/JPY positions given the elevated two-way volatility that typically accompanies official intervention periods. Key support for USD/JPY lies at recent pre-intervention lows, while resistance is defined by the levels where selling was triggered. The implications extend beyond the yen, as dollar weakness is spilling over into other major pairs.