USD/JPY is awaiting intervention from Japan near the 30-year high above 149.00, as yields remain sluggish

The USD/JPY trades between 149.20 and 30 when Tokyo starts on Wednesday. In doing so, the yen pair posts modest losses while reversing the 10-day upswing, as Japanese policymakers roll up their sleeves to defend a currency that remains at its lowest levels against the US usd in 30 years.

Reuters reports that Japanese Finance Minister Shunichi Suzuki recently stated that he was monitoring currency rates "carefully" and increasingly frequently as the yen continues to drop versus the dollar and markets watch for signs of intervention. The news also quotes Japan's Suzuki as stating the government will "act appropriately" on the foreign exchange market based on current policies.

It should be highlighted, however, that the US dollar has been unable to profit on the stronger industrial production amid the risk-on sentiment and sluggish Treasury yields, so posing a recent challenge to USD/JPY investors.

However, the US Dollar Index (DXY) stays stagnant near 112.00 as 10-year US Treasury yields fluctuate near the 4.00% threshold. In addition, S&P 500 Futures increase by 0.80% intraday, mirroring Wall Street's second daily gain.

In conclusion, lackluster yields and Japan's officials' bluster pose a challenge to USD/JPY bulls. However, the market's risk-taking disposition and the dollar's inability to recover kept purchasers optimistic.

The yen pair is primarily driven by the monetary policy divergence between the Federal Reserve and the Bank of Japan (BOJ). Recently, the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, stated, "Until I see convincing evidence that core inflation has at least peaked, I am not prepared to suspend rate hikes." In his most recent statements, BOJ Governor Haruhiko Kuroda defends the cheap money policy.

Moving forward, secondary US housing data will adorn the calendar, but the focus will be on Japan's involvement and risk catalysts for unambiguous direction.