USD/JPY trading near 162.50 with Tokyo closed for a holiday puts the pair firmly back in territory that has previously drawn Ministry of Finance action, and the reduced liquidity typical of a Japanese holiday session raises the risk of outsized moves in either direction. Trading will continue through the Asian day via Singapore, Hong Kong and Australia and New Zealand, but with Tokyo desks absent, order books tend to thin out, a dynamic authorities have exploited before to maximise the impact of any intervention. Given that Japan's record ¥11.73 trillion intervention in April and May this year only briefly capped USD/JPY before the pair pushed back above 160 within six weeks, traders are likely to treat any fresh move by Tokyo with caution rather than assuming a durable turn in trend. For now, the setup argues for elevated volatility risk around the 162.50 area rather than a directional call, with headline risk from Tokyo officials capable of triggering sharp intraday swings.---A quiet Tokyo holiday is exactly the kind of thin-liquidity backdrop Japan has used before to strike at the yen.Earlier, USD supported:Iran fires new missile wave at Gulf as oil and dollar both jump - escalation fueling gainsUS launches ninth night of Iran strikes as missiles fly from KuwaitSummary:USD/JPY is trading around 162.50, with Japanese markets closed for a public holidayYen trading continues through the session in other Asian centres, notably Singapore, Hong Kong, and Australia and New ZealandTraders remain on intervention alert, with concern that thinner holiday liquidity could give Tokyo an opportunity to act more forcefully to support the yenJapan's Ministry of Finance deployed a record ¥11.73 trillion, or $73.35 billion, in intervention in April and May 2026 after USD/JPY breached the 160 level, according to Lazard Asset ManagementThat April intervention was Japan's first yen-buying operation since July 2024, and despite its unprecedented scale the pair returned above the intervention level within six weeksUSD/JPY is trading around 162.50 on Monday with Japanese markets closed for a public holiday, a backdrop that has traders on heightened alert for possible currency intervention. While Tokyo itself is shut, yen trading will continue through the session in other regional centres, notably Singapore, Hong Kong, and Australia and New Zealand, though liquidity in those hours is typically thinner than during a full Tokyo session.That thinner liquidity is precisely what has traders on edge. A holiday in Japan can exacerbate volatility in the yen, and dealers are wary that Tokyo could look to exploit reduced market depth to bolster the currency with greater price impact than an intervention conducted during normal trading hours would achieve. Japanese authorities have a track record of favouring exactly this kind of setup, intervening during low-liquidity windows, including holiday periods, to maximise the shock value of any action.The current backdrop echoes the conditions that preceded Japan's most aggressive intervention effort to date. In April and May of 2026, the Ministry of Finance deployed a record ¥11.73 trillion, equivalent to roughly $73.35 billion, in FX intervention after USD/JPY breached the politically sensitive 160 level. That episode marked Japan's first yen-buying operation since July 2024 and was nearly double the scale of its largest prior effort. Yet even with that unprecedented firepower, USD/JPY climbed back above the intervention level within roughly six weeks, underscoring how difficult it has become for Tokyo to durably reverse the yen's slide against a backdrop of persistent inflation expectations and a still-wide US Japan rate differential.With USD/JPY once again trading well above 160 and Tokyo closed for the day, the market is left to weigh the odds that authorities use the quiet session to send a message, whether through verbal warnings or actual yen buying. Given the scale and speed with which the April intervention was ultimately overwhelmed, any action today would likely be read by traders as buying time rather than establishing a durable floor for the yen. This article was written by Eamonn Sheridan at investinglive.com.