$USDJPY157.399994 In late June, I wrote, "Unilateral intervention rarely succeeds, but coordinated intervention can have a more sustained effect. Without Washington on board, MOF can slow the move, as we saw in May, but it is unlikely to reverse the trend when fundamentals are still pointing the other way."

I put it more bluntly on July 25: "Unilateral intervention rarely changes the trajectory of a fundamentally driven currency move."

After Thursday's MOF intervention, I wrote that the cycle could be broken in only two ways. MOF could deploy enough firepower to push USDJPY low enough to trigger a self-reinforcing move lower, or the BOJ could hike aggressively and signal that more was coming. If neither happened, the third path was simple: the familiar cycle would repeat. USDJPY would grind back toward the YTD high, perhaps make a new high, MOF would intervene again, and the pair would eventually grind higher once more.

What I failed to include was a third cycle-breaker I had mentioned several times in the past: coordinated intervention with the U.S. On Friday, Washington joined. USDJPY then delivered its first decisive daily close below the long-term ascending trendline.

As I laid out after the April 30 intervention, intervention only becomes durable when official yen buying pushes USDJPY low enough that traders positioned against the authorities lose enough money to have no choice but to unwind. That forced unwind is what makes the move self-reinforcing. Until then, intervention remains highly susceptible to reversal, exactly as we saw from April through July.

Breaking the ascending trendline was the right move. Several Japan-only intervention rounds from April 30 through early May failed to secure a daily close below it. The first day Bessent joined the effort, it broke. As Trump's personal trading adviser, Bessent has undoubtedly helped Trump make key decisions when major assets were sitting at key technical levels. Trump and Bessent have repeatedly shown how effective they can be at reversing trends.

I was explicit about the level in May: "For USDJPY to initiate a self-reinforcing downward spiral, the BOJ must sustain a break below the 155.5 level for a few days."

We are not there yet. The trendline break is the first real change in the April-to-July sequence, but the setup is not complete. A sustained break below 155.5 for several days would raise the odds of the self-reinforcing downward spiral I described in May, but it would not make that outcome inevitable.

The oil-inventory cushion is far thinner than it was in April. OECD stocks fell by 135 million barrels in May and June, while the U.S. SPR is now more than 100 million barrels below its early-April level. With less inventory available to absorb another oil shock, the fundamental backdrop for the yen is less favorable than it was during the first intervention.