The current situation indicates that any potential improvement in the Japanese Yen’s value relies heavily on a decrease in US interest rates, according to economists at ING.

They mention that the decrease in foreign exchange (FX) market volatility might maintain pressure on the Japanese Yen due to the demand for carry trades. This situation makes USD/JPY particularly dependent on changes in US interest rates.

In the short term, USD/JPY could revisit the 152.00+ level, which has previously seen verbal interventions to control its movement. Despite verbal interventions in Japan and a weakening trend in the US Dollar, the Japanese Yen’s recovery appears closely linked to a decline in US rates.

While some factors like verbal interventions and a softer Dollar momentum provide slight support, the prevailing conditions highlight the importance of US interest rates in determining the Yen’s trajectory.

The overall outlook from ING remains pessimistic for USD/JPY in the future, with expectations that the pair might hover around the 152.00+ level immediately.

By Admin

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