Japanese Yen bears are feeling cautious due to fears of intervention, although the situation isn’t completely settled yet.

The Japanese Yen saw a slight increase after Japanese authorities made some comments to influence the market. BoJ Governor Kazuo Ueda’s somewhat hawkish remarks further supported the JPY.

Meanwhile, the US Dollar is maintaining its strength, supported by the Fed’s stance on interest rates, which is boosting USD/JPY.

The Japanese Yen has recovered slightly after hitting a low for the week against the US Dollar earlier today. Verbal intervention from Japanese authorities, along with comments from BoJ Governor Kazuo Ueda, have provided some support for the JPY. However, concerns about a recession in Japan may delay any significant changes in BoJ’s policy stance in the near future. Additionally, positive sentiment in equity markets may prevent significant appreciation of the safe-haven JPY.

On the other hand, the US Dollar is struggling to attract buyers, contributing to a slight pullback in the USD/JPY pair from the mid-150.00s. Expectations that the Federal Reserve will maintain higher interest rates for a longer period, supported by hawkish FOMC meeting minutes released yesterday, are boosting US Treasury bond yields, which favors the USD bulls and suggests an upward trend for the currency pair.

Japanese Finance Minister Shunichi Suzuki reiterated that the government is closely monitoring FX movements, providing some support for the Japanese Yen. BoJ Governor Kazuo Ueda noted that service prices are moderately rising and expects a positive cycle of tight labor market leading to higher wages and household income.

However, uncertainties surrounding Japan’s economy amid a recession may delay any changes in BoJ’s policy, keeping the Japanese Yen restrained. Economic data from Japan, including a decline in factory activity and a downgrade in the government’s economic outlook, also contribute to the cautious sentiment.

The US Dollar’s struggle to attract buyers persists despite the FOMC minutes revealing concerns about cutting rates too soon. Market participants now anticipate rate cuts to begin in June, which, combined with higher US Treasury bond yields, supports the USD bulls and the USD/JPY pair.

From a technical standpoint, USD/JPY is trading within a range, with bullish potential remaining intact. Resistance levels to watch include 150.85-150.90 and 151.45, while support levels are around 150.00 and 149.70-149.65.

By Admin

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