USD/JPY: Dollar Back at It Again with Fresh 2% Rebound in Three Days to Reclaim ¥155

Greenback is hungry for fresh gains as it erases about half of Japan’s intervention progress from last week.

• The USDJPY pair inched higher early Wednesday, on track to secure a third straight day of gains. Over this timespan, the dollar has regained roughly 2%, reclaiming the ¥155.00 level against a weakening yen. Japan’s currency is once again in the hands of dollar bulls despite huge efforts by Japanese officials to try and bolster its valuation.
• Last week, Japan’s government intervened in the forex markets by buying roughly $60 billion worth of yen. The operation was a mixed success — on the one hand, it helped the dollar-yen go down by about 5% from ¥160.20 to ¥152.00. But on the other hand, this showed currency speculators that Japan may not be a worthy opponent in a currency war.
• Pitted against the world’s best money spinners, Japan doesn’t have much of a chance. It has limited resources and could be vulnerable to attacks that can demolish the yen. A concerted effort by dollar bulls — such as the one markets are seeing now — could bulldoze its way to higher grounds against the yen, inflicting fresh pains and causing headaches for Japan’s officials.