Dollar slides across the board after USD/JPY selling hits
At a Glance
Lead — The desk interprets the recent decline in USD/JPY, which fell 1.6% to 157.60, as indicative of broader dollar weakness rather than a direct result of Japanese intervention. Per the full note , this price action suggests a more complex interplay of market dynamics, including month-end flows and a potential rate check rather than a sudden intervention. The dollar is sliding against other major currencies, with notable moves in USD/CHF and AUD/USD. This backdrop raises questions about the sustainability of dollar strength in the near term.
Full Analysis
What the desk is arguing
The desk frames this as a potential turning point for the dollar, driven by both technical factors and market sentiment. The sharp decline in USD/JPY, particularly following comments from Japan's finance minister, signals a moment of vulnerability for the dollar, which is also experiencing weakness across other major pairs.
Supporting this view, the desk notes that USD/JPY has dropped approximately 300 pips since the intervention warning, reflecting broader market dynamics rather than isolated intervention activity. The simultaneous decline in USD/CHF by 0.6% and a rise in AUD/USD by 0.5% further illustrates the dollar's weakening position against a basket of currencies.
Where it sits in our coverage
Our consensus target for USD/JPY stands at 1.075, with a range of 1.04 to 1.12. Key firms contributing to this consensus include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.12 (Mar26)
This view aligns with jpmorgan, which is positioned at the upper end of the target range, suggesting a more bullish outlook compared to bofa, which sits at the lower end. The desk's assessment reflects a cautious stance amidst potential volatility in the dollar's trajectory.
How other firms see it
Firms such as jpmorgan and citi are aligned with the desk's view, indicating a bearish sentiment on the dollar's near-term outlook. In contrast, bofa presents a more cautious stance, suggesting potential support for the dollar at lower levels.
Watch for developments in USD/JPY as well as the broader implications for EUR/USD, particularly in relation to ECB policy shifts and U.S. economic indicators that could influence dollar strength.
What the calendar says
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AUD/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Goldman Sachs | Bullish | 0.7000 |
MUFG | Bullish | 0.7000 |
J.P. Morgan | Bullish | 0.6800 |
From the original
USD/JPY is now down 1.6% to 157.60 and that marks about a 300 pips decline from when Japan finance minister Katayama came out earlier to deliver one final intervention warning to markets. Of note, the pair is seeing a sharper decline in the past half-hour with that accounting for