Finance Minister Satsuki Katayama repeated that the Bank of Japan is ready to intervene, with the tone seeming like patience at the BoJ has run out to tolerate a weak Yen. Glancing at the chart, we can see that the Yen will have a rough time recovering ground, as the USD/JPY pair has a plethora of solid support areas underneath current prices.
USD/JPY on the Daily Timeframe
Furthermore, price action at the current highs does not indicate a traditional topping pattern; if anything, this looks like a short-term pause before continuation. A lot of the reaction depends on whether the BoJ will intervene, and to what magnitude it will do so.
Another factor in the equation is the rate differential between the USD and the Yen, which is what allows the carry trade to persevere and thus keeps the Yen elevated. Until the differential between these currencies is narrowed, it seems hard to imagine that further intervention of the BoJ will create a long-term, multi-year top. Further rate hikes of the BoJ combined with intervention could, however, be that signal, and would warrant looking for the technicals to align with this bearish view.