The US Dollar is falling for a 3rd consecutive day to its lowest since September on speculation of joint US-Japan intervention.

The yen rallied +1% to ~154 per USD, the highest in 2 months.

This comes as rate checks conducted by both US and Japanese authorities suggest coordinated preparation for direct market intervention.

The US has not joined a coordinated effort to intervene in Japanese currency markets since March 2011, when it sold yen following the Fukushima earthquake.

Importantly, policy coordination would signal a willingness to tolerate easier global Dollar conditions, which could reinforce further US Dollar downside.

A stronger yen could trigger a violent unwinding of carry trades, or spark fears of unwinding and lead to the stock market sell-offs, similar to July-August 2024.

Watch closely what is happening in Japan.