Japanese yen remains in focus as we look towards the end of the week

The Japanese yen remains the most volatile among the major currencies today with USD/JPY holding a larger range after the downdraft earlier in Asia trading. The pair hit a low of 157.97 after some added verbal intervention by Japan finance minister Katayama here. That before rebounding to 158.30 levels now, still well below the earlier highs around 158.60-70.Now, verbal intervention by Tokyo officials isn't anything new when it comes to their attempts to arrest the currency decline. However, this time around the language that is used is a bit more different.Katayama already stood out with an oddly specific comment about price movement earlier this week here. And today's remarks even went as far as saying that their readiness to intervene in the market is "included in an option in the US-Japan agreement". In other words, he's delivering a warning to the market that Tokyo has got the green light from Washington to step in if need be.Still, the Takaichi trade remains a key driver in continuing to weigh down the yen currency since October. And that momentum remains very much intact in the big picture. But at least for today, the near-term sentiment has shifted a little:After numerous attempts to try and break under the 100-hour moving average (red line) this week, USD/JPY sellers finally made the breakthrough today. And that sees the near-term bias switch to being more neutral now with price action keeping in between that and the 200-hour moving average (blue line).That leaves some room to roam as traders look to figure out how a snap election will factor into the Takaichi trade and if any further selling in the yen could trigger Tokyo to intervene in the market. On the former, Credit Agricole notes that opposition lawmakers trying to fight against Takaichi's premiership will at least reduce the one-sidedness of the trade against the yen.The firm argues for that there is an element of buy the rumour, sell the fact in considering the impact of Japan's political scene towards the yen currency.As things stand, they see investors continuing to buy up yen pairs in anticipation of looser fiscal and monetary policy under a strengthened Takaichi mandate.But with positioning flows already clearly leaning towards further yen weakness, the risk is that the market starts to fade the election story once it is officially called next week as opposition lawmakers gather to try and take on Takaichi and reduce her political influence. In turn, Credit Agricole sees that as a risk in creating headwinds for further USD/JPY upside driven by solely by politics.