The yen fell to a 40-year low near 162, which triggered intervention risk. But when could it happen?
Yesterday, reports showed communication between US and Japanese officials about the exchange rate may have raised concern about cooperation between the US and Japan on action in response to the recent situation.
However, recent market sentiment now focuses on the hawkish Fed, which tends to hike rates more than once this year. This strengthens the US dollar further and might reduce the potential intervention's effect. Easing market concerns about US inflation, especially the upcoming PCE data, might trigger the intervention. The ideal scenario is when a lower-than-expected PCE release combined with further positive information from peace deal progress might allow the Strait of Hormuz to fully open, easing oil supply and inflation concerns.
Meanwhile, in the short run, the yen might continue to face pressure surrounding expectations that too gradual tightening by the BoJ might bolster the yen carry trade amid expectations of a Fed rate hike.
Though potential intervention might dampen the dollar-yen to the 156-157 level, the market should focus more on any signal of easing in US inflation, which might trigger Ministry of Finance (MoF) intervention on the yen.
Technically, USDJPY retains strong bullish momentum, holding above both EMA extensions but facing important resistance at 161.8.
A breach above the 161.8 level might trigger USDJPY to continue to strengthen to the 100% Fibonacci extension at 163.24.
Conversely, falling below 160.6 might lead USDJPY to find support at 159.8.
By Van Ha Trinh - Financial Market Strategist at Exness
Yesterday, reports showed communication between US and Japanese officials about the exchange rate may have raised concern about cooperation between the US and Japan on action in response to the recent situation.
However, recent market sentiment now focuses on the hawkish Fed, which tends to hike rates more than once this year. This strengthens the US dollar further and might reduce the potential intervention's effect. Easing market concerns about US inflation, especially the upcoming PCE data, might trigger the intervention. The ideal scenario is when a lower-than-expected PCE release combined with further positive information from peace deal progress might allow the Strait of Hormuz to fully open, easing oil supply and inflation concerns.
Meanwhile, in the short run, the yen might continue to face pressure surrounding expectations that too gradual tightening by the BoJ might bolster the yen carry trade amid expectations of a Fed rate hike.
Though potential intervention might dampen the dollar-yen to the 156-157 level, the market should focus more on any signal of easing in US inflation, which might trigger Ministry of Finance (MoF) intervention on the yen.
Technically, USDJPY retains strong bullish momentum, holding above both EMA extensions but facing important resistance at 161.8.
A breach above the 161.8 level might trigger USDJPY to continue to strengthen to the 100% Fibonacci extension at 163.24.
Conversely, falling below 160.6 might lead USDJPY to find support at 159.8.
By Van Ha Trinh - Financial Market Strategist at Exness
면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.
면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.