Japanese yen weekly outlook: BOJ intervention threat leaves USD/JPY on edge

Thursday's abrupt decline in USD/JPY reignited speculation that the Bank of Japan may have stepped into the market on behalf of Japan's Ministry of Finance. Whether that was the case remains unclear, but it's plausible the move reflected a combination of other factors, including a well-timed Reuters report suggesting Japanese authorities may be looking to catch speculators off guard, heavily stretched short yen positioning, thinning liquidity ahead of the US payrolls report and Independence Day holiday, and Federal Reserve Chair Kevin Warsh striking a slightly less hawkish tone only hours earlier.