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CFD Trading Rate US Dollar vs Japanese Yen (USDJPY)

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  • 22.02.2024 09:28
    USD/JPY: A substantial turn lower probably requires a turn in the broad Dollar trend – ING

    The stand-out funding currency, the Japanese Yen (JPY), is the worst performer at -6% year-to-date versus the US Dollar (USD). Economists at ING analyze USD/JPY outlook.

    Under-valued, but weighed by the carry trade

    We cannot see the low volatility/carry friendly environment turning anytime soon, suggesting the Yen stays weak. However, we now think that the JPY is close to 15% under-valued on our medium-term fair value models.

    A substantial turn lower in the USD/JPY probably requires a turn in the broad Dollar trend, something we look for late in the second quarter. Should USD/JPY make it into the 155.00/160.00 area beforehand, we would see that as a good medium-term level for corporates to ratchet higher their USD receivables/JPY payables hedging plans.

     

  • 21.02.2024 17:22
    USD/JPY Price Analysis: Advances above 150.00 as markets anticipate Fed minutes
    • USD/JPY reaches 150.30, gaining ahead of key Fed meeting insights, maintaining an upward trajectory.
    • Technical indicators highlight bullish stance, with potential resistance near 151.00 amid intervention concerns.
    • Support levels at 149.91 and 149.15 to be tested if retreat below 150.00 occurs, signaling possible shifts.

    The USD/JPY climb above the 150.00 figure extended its gains ahead of the release of the minutes of the lates Federal Reserve’s (Fed) meeting. At the time of writing, the pair trades at 150.30, up by 0.20%.

    The daily chart portrays the pair as upward biased, sigting above the Ichimoku Cloud (Kumo) and above the Tenkan and Kijun-Sen. That along with Relative Strength Index (RSI) studies at bullish territory, would suggest the USD/JPY could test the 151.00 figure and beyond, if not for Japanese authorities threats to intervene the markets. A breach above 151.00 would expose last year’s high of 151.91.

    Conversely, if USD/JPY drops below the 150.00 mark, that would exacerbate a test of the Tenkan-Sen at 149.91. Once cleared, the next support would be the Senkou Span A at 149.15, followed by the Kijun-Sen at 148.39.

    USD/JPY Price Action – Daily Chart

     

  • 21.02.2024 12:14
    USD/JPY Price Analysis: Hovers around the psychological support of 150.00 on Wednesday
    • USD/JPY could break below immediate support at the 150.00 psychological level.
    • A break below a nine-day EMA at 149.81 could lead the pair to test the major support at 149.50.
    • Technical indicators suggest a confirmation of the bullish trend for the pair.

    USD/JPY seems to remain in the negative territory for the third consecutive day. The USD/JPY pair hovers near 150.10 during the European session on Wednesday. The immediate support appears at the psychological level of 150.00.

    A break below the latter could impact the USD/JPY pair to test the nine-day Exponential Moving Average (EMA) at 149.81 followed by the major support at 149.50. If the pair breaks the major support, it could approach the psychological support zone around the 149.00 level following the 23.6% Fibonacci retracement level of 148.50.

    However, the technical analysis for the USD/JPY pair suggests a bullish momentum as the 14-day Relative Strength Index (RSI) is positioned above the 50 level. Additionally, the lagging indicator of the Moving Average Convergence Divergence (MACD) signals a confirmation of the bullish trend, with the MACD line positioned above the centerline and the signal line.

    On the upside, the USD/JPY pair could find the resistance zone around the weekly high at 150.43 and the major barrier at 150.50 level. A breakthrough above this zone could lead the pair to revisit February’s high at 150.88 followed by the psychological resistance level of 151.00.

    USD/JPY: Daily Chart

     

  • 20.02.2024 22:41
    USD/JPY Price Analysis: Drops below 150.00 as US yields weigh on US Dollar
    • USD/JPY hovers at 149.96, influenced by a dip in US Treasury yields and a subdued Dollar.
    • Market's tight range near 150.00 may shift, watching for Japanese authority interventions.
    • A move below 150.00 might steer USD/JPY towards 149.00, as an uptrend seeks to top 150.00 again.

    The USD/JPY is almost flat as Wednesday’s Asian session begins after posting minuscule losses of 0.09% on Tuesday, at the time of writing trades at 149.96. The drop in US Treasury bond yields and a subdued US Dollar (USD) were the two reasons that favored the Japanese Yen (JPY).

    The pair has consolidated at around the 149.90-150.00 area for the last three trading sessions, capped on the upside by fears that Japanese authorities might intervene. However, if bulls push prices decisively above 150.00, that will pave the way toward the February 13 high at 150.88, followed by the 151.00 mark.

    Conversely, if the USD/JPY tumbles below the Tenkan-Sen at 149.91, that would exacerbate the pair’s fall toward the Senkou Span A area at 149.15 before testing the 149.00 area. A breach of the latter will expose the Kijun-Sen at 148.39, ahead of the 148.00 mark.

    USD/JPY Price Action – Daily Chart

     

  • 20.02.2024 14:23
    USD/JPY Price Analysis: Extends downside to 150.00 as USD Index drops to weekly low
    • USD/JPY falls to near 150.00 amid a sell-off in the USD Index.
    • Fed policymakers warned that over-focusing on a one-time inflation increase could be a tremendous mistake.
    • The BoJ may postpone plans of exiting the expansionary monetary policy stance.

    The USD/JPY pair falls slightly below the psychological support of 150.00 in the early New York session on Tuesday. The asset has faced selling pressure as the US Dollar Index (DXY) has extended its downside to 104.00.

    The USD Index has dropped to a weekly low as Federal Reserve (Fed) policymakers are confident that inflation is in the right direction despite a one-time stubborn-than-anticipated consumer price inflation data for January.

    Fed policymakers advised that over-focusing on one-time blips in inflation data could be a tremendous mistake. As per the CME FedWatch tool, investors see interest rates remaining unchanged in the range of 5.25%-5.50% till the July policy meeting as the Fed needs more good inflation data for months.

    The Japanese Yen performs better against the US Dollar despite easing hopes for the Bank of Japan (BoJ) quitting the decade-long ultra-dovish monetary policy stance. The Japanese Yen entered a recession in the second half of 2023. The situation of a poor domestic economy is an unfavorable situation for exiting the expansionary policy stance.

    USD/JPY oscillates in a Symmetrical Triangle formation on an hourly time frame. The upward and downward-sloping borders of the aforementioned chart pattern are plotted from February 13 low and high at 149.27 and 150.88, respectively.

    The triangle could breakout in either direction, however, the odds marginally favor a move in the direction of the trend before the formation of the triangle – in this case up.

    The 50-period Exponential Moving Average (EMA) around 150.20 remains sticky to spot prices, indicates indecisiveness among market participants.

    Going forward, a decisive break above February 13 high at 150.88 would drive the asset towards November 16 high at 151.43, followed by November 13 high at 151.90.

    On the flip side, a breakdown below February 13 high at 149.27 would drag the asset towards February 5 high at 148.90. Breach of the latter would expose the asset to January 29 high at 148.32.

    USD/JPY hourly chart

     

  • 20.02.2024 12:11
    The peak in Treasury yields will mark the high in USD/JPY – SocGen

    Yield differentials need to turn down before we buy the Yen, Kit Juckes, Chief Global FX Strategist at Société Générale, says.

    There should only be a few more weeks of pain for Yen ‘dip-buyers’

    The Yen remains under pressure. Is the end of yield curve control and negative rates priced-in, or is the market getting too bearish of the JPY? I prefer the latter interpretation.

    So far, so simple. Tell me when 10-year Note yields will peak and I’ll tell you when USD/JPY peaks.

    The chance of NIRP and YCC policies being ditched at the March 19 BoJ meeting has increased, but how will/would markets react? When rates were cut to -0.1% in 2016, the first reaction saw the yen rally, but the backdrop was very different. It may take some time for the penny to drop, but unless confidence that the Fed’s next move is to ease, is seriously tested (and that’s the big tail risk for all markets) then bringing the curtain down on negative rates and yield curve control ought to signal a long-term turning-point for the Yen. There should only be a few more weeks of pain for Yen ‘dip-buyers’.

     

  • 20.02.2024 07:56
    USD/JPY gains ground on risk-off mood ahead of FOMC minutes, improves to near 150.30
    • USD/JPY extends gains on risk-off sentiment ahead of FOMC minutes.
    • The US Fed is expected to avoid any rate cut in March and May.
    • Japan’s official Atsushi Mimura stated government communicates with other countries regarding FX intervention.

    USD/JPY strengthens for the third consecutive trading day, supported by a stronger US Dollar (USD). This uptrend can be attributed to market sentiment, which is biased towards the possibility of the Federal Reserve (Fed) refraining from implementing any rate cuts in the upcoming meetings in March and May. This sentiment has been reinforced by stronger data on consumer and producer prices released last week. The USD/JPY pair trades higher around 150.30 during the early European session on Tuesday.

    ANZ has forecasted that the Federal Reserve (Fed) could commence a rate-cutting cycle starting from July in mid-summer. According to the CME FedWatch Tool, there is a 53% probability of a 25 basis points rate cut by the US Fed in the June meeting.

    The US Dollar Index (DXY), which gauges the value of the US Dollar against six other major currencies, ends its four-day losing streak. The DXY trades higher around 104.30, with 2-year and 10-year yields on US bond coupons standing at 4.64% and 4.29%, respectively, at the time of writing.

    On the other side, Japanese Finance Ministry official Atsushi Mimura stated on Tuesday that the government "is continually communicating and coordinating with other countries regarding FX intervention." He emphasized the importance of maintaining safety and securing liquidity in FX reserves management. Mimura mentioned that the government can sell assets such as savings and foreign bonds in FX reserves when intervention is deemed necessary.

    Moreover, Finance Minister Shunichi Suzuki remarked that while a weak Yen has both advantages and disadvantages, he expressed greater concern about the negative implications of a weak currency. In an earlier interview, Suzuki also noted, "The Bank of Japan (BoJ) holds jurisdiction over monetary policy. But there will come a time when interest rates rise."

    Market participants will likely observe the Trade Balance data with Import and Export figures for January on Wednesday. Furthermore, the focus will shift to the Federal Open Market Committee’s (FOMC) meeting minutes.

     

  • 20.02.2024 00:55
    USD/JPY holds ground above 150.30, FOMC Minutes eyed
    • USD/JPY rebounds to 150.32 on the firmer US dollar in Tuesday’s early Asian session. 
    • Finance Minister Shunichi Suzuki said he was more concerned about the negative aspects of a weak currency.
    • Investors anticipate the first 25 basis points (bps) rate cut in 2024 as early as June.

    The USD/JPY pair holds above the 150.00 psychological mark during the early Asian trading hours on Tuesday. The pair edges higher on the day due to the renewed US Dollar (USD) demand. Meanwhile, which tracks six major currencies to gauge the USD’s value, recovers to 104.35. USD/JPY currently trades near 150.32, up 0.12% on the day. 

    With inflation exceeding its 2% target over a year, the Bank of Japan (BoJ) has signaled that it will end its negative interest rate policy in the coming months. BoJ Governor Kazuo Ueda said on Friday that the central bank will examine whether to maintain various easing measures, including a negative interest rate, when sustained, stable achievement of the price target comes into sight.

    The upside of the USD/JPY pair might be capped due to the verbal intervention from the Japanese authorities. Finance Minister Shunichi Suzuki said that while a weak Yen has merits and demerits, he was more concerned about the negative aspects of a weak currency.

    On the other hand, Federal Reserve (Fed) Chair Jerome Powell has pushed back against the expectation of interest rate cuts, and investors expect the first 25 basis points (bps) rate cut in 2024 as early as June. The FOMC Minutes on Wednesday might offer some hints about further monetary policy, given recent signs of stubborn inflationary pressures.

    Moving on, Japan’s Trade Balance will be due on Wednesday ahead of the FOMC Meeting Minutes. Traders will also focus on the Fed's Bostic and Bowman speech. On Thursday, the preliminary Japanese Jibun Bank PMI for February will be released. 

     

  • 19.02.2024 22:01
    USD/JPY Price Analysis: Remains steady around 150.00 amid quiet US holiday session
    • USD/JPY at 150.13, stabilizing amid quiet trading from the US holiday.
    • Bulls aim for a break above 150.88 year-to-date high, targeting 151.91+.
    • Decline below 150.00 may prompt tests of lower support, as technicals suggest crucial markers.

    The USD/JPY traded sideways during a choppy trading session late on Monday, with Wall Street remaining closed in observance of President’s Day. At the time of writing, the pair exchanges hands at 150.13, flat.

    From a technical perspective, the USD/JPY is neutral to upward biased, but it seems to have peaked at around the 150.00 area as Japanese authorities threatened to intervene in the Forex markets. Nevertheless, bulls remain in charge, and if they push the exchange rate above the current year-to-date (YTD) high of 150.88, that will exacerbate a rally above the 151.00 figure, with buyers targeting the 2023 high at 151.91. A breach of the latter will expose the 152.00 mark.

    On the flip side, if sellers drag the exchange rate below 150.00, look for a dip lower, initially to the Tenkan-Sen at 149.25. Once cleared. The next stop would be the Senkou Span A at 148.57, followed by the Kijun-Sen at 147.88.

    USD/JPY Price Action – Daily Chart

     

  • 19.02.2024 10:26
    USD/JPY corrects to near 150.00 as USD Index drops in a US holiday-shortened week
    • USD/JPY falls to near 150.00 as USD Index remains under pressure.
    • Traders pare Fed rate cut bets for May amid stubborn inflation data.
    • The BoJ may postpone plans for exiting its dovish policy stance amid dismal economic growth.

    The USD/JPY drops to near the psychological support of 150.00 in Monday’s European session. The asset has faced selling pressure due to further decline in the US Dollar Index (DXY). The USD Index, which tracks six major currencies to gauge Greenback’s value, has dropped to near 104.20.

    S&P500 futures remain subdued in the London session amid an extended weekend due to the holiday in US markets because of Presidents’ Day. Meanwhile, 10-year US Treasury yields have rebounded to 4.31%, prompted by the hotter-than-expected Producer Price Index (PPI) and the consumer price inflation data for January.

    While market participants have pared bets in favor of rate cuts in the May monetary policy meeting by the Federal Reserve (Fed), policymakers consider the surprisingly higher data as a one-time blip whose consideration could be a tremendous mistake. The broader inflation trend is declining, which should be mainly in focus.

    Going forward, market participants will focus on the Federal Reserve (Fed) Open Market Committee (FOMC) minutes for the January policy meeting, which will be released on Wednesday. The FOMC minutes will provide the detailed reasoning behind maintaining the status-quo and a fresh outlook on interest rates.

    Meanwhile, the Japanese Yen has been underpinned against the US Dollar, although investors have dialed back expectations for the unwinding of the expansionary monetary policy stance by the Bank of Japan (BoJ). The Japanese economy has entered a technical recession, which would force BoJ policymakers to continue with plans of expanding stimulus to support economic growth.

    On the economic data front, investors await the preliminary Jibun Bank Manufacturing and Services PMI for February, which will be published on Tuesday.

     

  • 19.02.2024 10:17
    USD/JPY: Any further gains could prompt renewed intervention in Japan – MUFG

    Last week, USD/JPY moved back above the 150.00 level for the first time since November. Economists at MUFG Bank analyze the pair’s outlook.

    GDP data if anything could encourage intervention

    We don’t see the weaker-than-expected real GDP data as altering the outlook for the Yen. Indeed, quite the opposite it will probably reinforce the determination of the MoF to limit further JPY depreciation. At the same time, the BoJ will likely view the GDP data as a consequence of the inflation shock and is unlikely to alter the prospects of a rate hike. 

    Just like on the previous occasions when USD/JPY reached these levels, we see momentum fading but broader US Dollar strength that could continue near term may mean intervention is required to stall the move.

     

  • 19.02.2024 02:34
    USD/JPY depreciates to near 150.00, Japan Machinery Orders improves
    • USD/JPY retraces its recent gains on subdued the US Dollar.
    • The better-than-expected Machinery Orders showed improved business confidence in Japan’s manufacturing industry.
    • US markets will observe Monday as a bank holiday on President's Day.

    USD/JPY edges lower to near 150.00 during the Asian session on Monday after registering a volatile session in the previous session. The Japanese Yen (JPY) cheers the improved Machinery Orders data from the country. However, the USD/JPY pair soared on better-than-expected Producer Price Index (PPI) data from the United States on Friday. However, gains were trimmed after dovish remarks on the Federal Reserve’s (Fed) policy from James Bullard, former president of the St. Louis Fed.

    Japan’s Machinery Orders (MoM) rose by 2.7% against the expected 2.5% in January, swinging from the previous decline of 4.9%. While the YoY improved to -0.7% compared to the anticipated -1.4% and previous decline of -5.0%. These figures showed improved business confidence in Japan’s manufacturing industry.

    Over the weekend, Japanese Finance Minister Shunichi Suzuki said in an interview that “The Bank of Japan (BoJ) holds jurisdiction over monetary policy. But there will be a phase when interest rates go up”.

    On the other side, former Federal Reserve official James Bullard, speaking at the National Association for Business Economics (NABE) conference, suggested that the Federal Reserve should contemplate reducing interest rates at its March meeting to prevent stifling economic activity due to higher rates.

    The US Producer Price Index (PPI) revealed a year-over-year growth of 0.9%, surpassing the expected 0.6% and previous 1.0%. Additionally, the monthly improvement was 0.3%, contrasting the previous decline of 0.1%. However, the preliminary Michigan Consumer Sentiment Index rose to 79.6 from the prior 79.0, falling short of the anticipated reading of 80.0.

    In January, the US Core Producer Price Index (YoY) increased by 2.0%, surpassing the expected 1.6% and the previous 1.7%. Meanwhile, the month-on-month (MoM) data indicated a 0.5% rise, compared to the anticipated 0.1% improvement from the prior decline of 0.1%. With US banks closed for the President's Day bank holiday, the market expects minimal movement in the US Dollar.

     

  • 16.02.2024 22:41
    USD/JPY Price Analysis: Holds above 150.00 ahead of the weekend
    • USD/JPY advances to 150.16, lifted by US inflation figures and positive consumer outlook.
    • Fed's Bostic and Daly call for a cautious stance on rate cuts, advocating patience.
    • Technical outlook suggests bullish potential for USD/JPY, eyeing targets beyond 151.00 with key supports in focus.

    The USD/JPY is set to finish the day and the week positively, with the major clinging above the 150.00 figure, posting daily gains of 0.16%, exchanging hands at 150.16.

    Fundamentally speaking, Friday’s data suggests inflation in the United States (US) is stickier than expected, as shown by the latest Producer Price Index (PPI) report, with the headline and underlying PPI exceeding the consensus and the previous month’s reading. Despite this, the latest Consumer Sentiment report, showed Americans remain optimistic about the economic outlook, despite upward revising inflation expectations for one year.

    Given this backdrop, Federal Reserve officials Bostic and Daly acknowledged the progress on inflation but remained cautious about providing a timetable for interest rate cuts. Both suggested that patience is required before the Fed begins its easing cycle.

    From a technical standpoint, the USD/JPY is neutral to upward biased after peaking at around the 150.00-150-88 area following the release of US inflation figures. For a bullish continuation, buyers must lift the exchange rate above 151.00, followed by the November 13 high at 151.91, before challenging 152.00.

    Conversely, if USD/JPY drops below 150.00, the first support would be the Tenkan-Sen at 149.25. The next support would be the Senkou Span A at 148.43, followed by the 148.00 figure. Downside risks emerge at the Kijun-Sen level at 147.62.

    USD/JPY Price Action – Daily Chart

     

  • 16.02.2024 11:06
    USD/JPY: Yield differentials to be a tailwind for the Yen during the year – Danske Bank

    Economists at Danske Bank view narrowing rate differentials between Japan and the G10 to favour the Japanese Yen (JPY) over the course of this year.

    USD/JPY to steadily decline below 140.00 on a 12M horizon

    We forecast USD/JPY to steadily decline below 140.00 on a 12M horizon. This is primarily because we expect limited upside to US yields from here. Hence, we expect yield differentials to be a tailwind for the JPY during the year, as G10 central banks, except the BoJ, are likely to commence rate-cutting cycles.

    In addition, historical data suggests that a global environment characterized by declining growth and inflation tends to favour the JPY.

     

  • 16.02.2024 08:53
    USD/JPY: BoJ’s incremental steps toward policy normalization should support a recovery in the Yen – UBS

    The strength in the Dollar pushed USD/JPY back above 150.00. Economists at UBS analyze Yen’s (JPY) outlook.

    The current entry point to buy the Yen is attractive

    We think the BoJ's policy normalization remains on track this year on strong wage hike negotiations and corporate profitability. 

    We maintain the view that the Japanese Yen has likely reached a turning point after significant underperformance between 2021 and 2023.

    With the US-Japan 10-year yield differentials expected to narrow as the year progresses, we think the current entry point to buy the Yen is attractive.

     

  • 15.02.2024 20:48
    USD/JPY Price Analysis: Retreats from yearly highs above 150.00
    • USD/JPY dips below 150.00 after peaking at 150.86, forming an 'evening star' pattern.
    • RSI suggests bullish momentum waning, with potential support and intervention points identified.
    • Reclaiming 150.00 could challenge higher levels, with 151.00 and 151.91 as key targets.

    The USD/JPY retreats after hitting a yearly high of 150.86 and tumbles below the 150.00 figure, courtesy of Japanese authorities' verbal intervention in the FX markets. At the time of writing, the pair is forming an ‘evening star’ and trades at 149.95, down 0.42%.

    The USD/JPY seems to have peaked at around 150.00, which could open the door for speculations of intervention. The Relative Strength Index (RSI) depicts the pair as bullish, but a downward slope indicates that buyers are losing momentum. If sellers push prices below the Tenkan-Sen level at 149.25, the first line of defense for bulls would be 149.00. A breach of the latter will expose the Senkou Span A at 148.43 before diving to 148.00.

     On the flip side, if buyers regain the 150.00 mark, that could pave the way for challenging the 151.00 mark, followed by last year’s high at 151.91.

    USD/JPY Price Action – Daily Chart

     

  • 15.02.2024 11:12
    USD/JPY drops to near 150.00 as USD Index falls ahead of US Retail Sales data
    • USD/JPY corrects to near 150.00 as USD Index edges down.
    • The US Retail Sales are forecasted to contract by 0.1% in January.
    • The Japanese economy has entered a technical recession after contracting in the last two quarters of 2023.

    The USD/JPY extends its correction to near the psychological support of 150.00 in Thursday’s European session. The asset has come under pressure as the US Dollar Index (DXY) and bond yields have dropped ahead of January's United States Retail Sales data.

    S&P500 futures have posted decent gains in the London session, indicating a revival in the risk appetite of the market participants. The broader market outlook is still uncertain as investors pare bets in favor of rate cuts by the Federal Reserve (Fed) for the May monetary policy meeting.

    The Fed's expectations for a rate-cut move have shifted for the June meeting as the consumer price inflation for January remained hotter than expected. Contrary, Chicago Fed Bank President Austan Goolsbee said on Wednesday that one bad inflation data is insufficient to impact the broader trend, which indicates that price pressures are coming down to the 2% target. Austan Goolsbee warned that a hawkish narrative for a more extended period could dampen the labor market conditions.

    The US Dollar Index (DXY) has corrected to near 104.60 from a three-month high of 105.00. Going forward, investors will focus on the US Retail Sales data, which will be published at 13:30 GMT. According to the consensus, Retail Sales were contracted by 0.1%.

    On the Tokyo front, the Japanese Yen strengthens despite investors' hope that the Bank of Japan (BoJ) will not exit the expansionary policy stance soon. The expectations of easy policy unwinding have waned as the Japanese economy has surprisingly entered into a technical recession. The Q4 GDP contracted by 0.1%, while investors forecasted an expansion of 0.3%.

     

  • 15.02.2024 09:14
    USD/JPY: A break of 152.00 will have some dusting-off calls for 160.00 – ING

    A surprisingly soft fourth quarter GDP release from Japan is only adding to the bearish story for the Yen, economists at ING say.

    Yen negatives build

    Japan released some surprisingly weak fourth quarter GDP figures for 2023. Even though USD/JPY has not moved much, these would seem to be Yen negative in that i) it provides fewer reasons for the Bank of Japan to exit its super-loose policy settings in April, and ii) given that exports were the main engine of growth, Japanese authorities may not be averse to a weak/weaker Yen after all. 

    The 152.00 area is clearly a big resistance level for USD/JPY – a break that will have some dusting-off calls for 160.00. 

    We do not think USD/JPY is particularly stable in this 150.00-152.00 area and feel that implied volatility levels are too cheap.

     

  • 14.02.2024 20:38
    USD/JPY Price Analysis:  Peaks shy of 151.00 as US Treasury yields drop
    • USD/JPY pulls back to 150.50s after touching highs near 150.80, following US CPI report-driven rally.
    • Technical indicators suggest an upward trend, but the 151.00 level poses a significant hurdle due to Japanese authorities intervention warnings.
    • Potential for further gains if 151.00 is breached; downside risks if it falls below the 150.00 support level.

    The USD/JPY retreats after peaking at around the 150.80s area and drops toward the 150.50s area late in the North American session as US Treasury bond yields retrace after hitting year-to-date (YTD) high.

    The pair peaked at around the 150.80s area, following last Tuesday’s 140-pip rally after a US inflation report revealed the Consumer Price Index (CPI) stands above the 3% threshold.

    From a technical perspective, the USD/JPY is upward biased after extending its gains above the Ichimoku Cloud (Kumo) and the Kijun and Tenkan-Sen levels. However, the 151.00 psychological figures could be challenging to surpass as Japanese authorities threatened to intervene in the Forex markets.

    If traders clear the psychological 151.00 figure, that could open the door to challenge last year’s high at 151.91, followed by the 152.00 mark.

    In another scenario, if sellers drag the exchange rate below 150.00, downside risks will emerge at the Tenkan-Sen at 148.55. Once cleared, up next would be the Senkou Span A at 148.05, before the 148.00 mark.

    USD/JPY Price Analysis: Technical outlook

     

  • 14.02.2024 12:02
    US Treasury would accept Japanese intervention to sell USD/JPY should it make a quick move to 152.00 – ING

    The broad-based Dollar rally has taken USD/JPY well above 150.00. Economists at ING analyze the pair’s outlook.

    Intervention cannot completely be ruled out

    Because this is a Dollar rather than a Yen-led move, the consensus view is probably that Japanese authorities will not be able to justify any FX intervention. 

    We are not so sure and suspect the US Treasury would again accept Japanese intervention to sell USD/JPY should it make a quick move to 152.00. At just 7.45%, one week USD/JPY implied volatility seems too low in that intervention cannot completely be ruled out.

     

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