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Seize Every Pullback Opportunity: Bulls Set to Break Through Subprime Crisis Sell-Off Levels
Forex
Summary:
The GBPJPY fell from multi-year highs to around 210.30 after Japan's Finance Minister Satsuki Katayama made verbal intervention in the market.
Buy
PENDINGGBPJPY
EXP
210.000
Entry Price
215.750
TP
208.000
SL
210.642 -0.631 -0.30%
--
Point
PENDING
208.000
SL
CLOSING
210.000
Entry Price
215.750
TP
Fundamentals
On Tuesday, GBPJPY retreated from Monday's multi-year high of 211.60 to around 210.30. Japanese Finance Minister Satsuki Katayama stated on Monday that the government may intervene in the market to counter excessive one-sided volatility, providing temporary support for the yen and halting GBPJPY's upward momentum.
Japanese Finance Minister Satsuki Katayama stated in a media interview that if exchange rate movements significantly deviate from economic fundamentals, the Japanese government possesses the flexibility to take decisive foreign exchange intervention measures. This represents her strongest warning to market speculators to date following the yen's recent sustained weakening.
Satsuki Katayama pointed out that last Friday's sharp depreciation of the yen was clearly not driven by fundamentals but stemmed from speculative behavior. She emphasized: “We have made it clear that we will take decisive action against such movements, as stated in the joint statement by the Japanese and U.S. finance ministers.” Her remarks came as markets once again speculated that Japanese authorities might intervene in the foreign exchange market.
Notably, Satsuki Katayama specifically referenced the joint statement on exchange rates signed by the Japanese and U.S. finance ministers in September, implying that Japan has tacit U.S. approval for intervention without further consultation. The statement reaffirmed both sides' support for market-determined exchange rates while confirming that intervention remains a reasonable option under exceptional circumstances such as “excessive volatility.” Satsuki Katayama stated, “This means we have the freedom to act.” The USDJPY and GBPJPY exchange rates promptly declined.
However, as we mentioned yesterday, if Japanese authorities attempt to prop up the yen through foreign exchange intervention, such efforts are likely to prove ineffective unless the government simultaneously manages fiscal policy risks appropriately.
The Japanese government is expected to approve its fiscal 2026 budget this Friday, with investors concerned that the budget may include an unusually large scale of departmental spending. Should this prove true, it could trigger a decline in Japanese government bond prices and further intensify downward pressure on the yen.
Technical Analysis
GBPJPY faced pressure on Tuesday but remains biased upward, with the near-term target at 211.98—the 61.8% retracement level of the 199.04 to 205.30 range. A decisive break above this level would extend the current uptrend toward the next target at 215.75 (marking the starting point of the 2008 subprime crisis sell-off). On the downside, a break below the short-term support at 210.00 would shift the intraday outlook to neutral, potentially triggering a consolidation phase before a fresh upward move.
Trading Recommendations
Trading Direction: Buy
Entry Price: 210.00
Target Price: 215.75
Stop Loss: 208.00
Valid Until: January 9, 2026 23:55:00
Support: 209.81, 209.29, 208.21
Resistance: 211.98, 212.82, 215.10
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