USD/JPY – Bearish continuation as yield differentials narrow
USD/JPY Price Forecasts: Bullish momentum fades after rejection at 159.00
Japanese Yen Outlook: Intervention Risk Limits Dollar Upside MUFG sees Japanese intervention risk limiting the US Dollar against the Yen, even as firmer US inflation puts renewed pressure on the exchange rate. Japan's resistance to a weaker Yen faces a fresh test after US inflation exceeded expectations, but MUFG doubts the Dollar.
The American currency tested yearly highs as traders focused on higher-than-expected inflation data.
The USD/JPY has broken above its 200-day moving average after a hotter-than-expected US inflation report revived bets on further Federal Reserve rate hikes. The pair had spent several sessions coiling just beneath that average ahead of the data, and the CPI release has now supplied the catalyst, lifting Treasury yields and the dollar alike.
USDJPY added more value above 157.85 as the drop pressure still overshadows the market as traders expect an intervention from the Bank of Japan. Intraday prices show resistances at 159.00 and 160.00, whilst a drop wave could hit the market toward 156.40 and 153.90.
The euro/U.S. dollar is recovering from a fresh 17-month low near 1.1150 and hovers just above 1.12 at the time of writing, although the broader bearish structure remains.
USD/JPY is holding above a key technical pivot as the recovery from the September low remains intact, but the advance has lost momentum beneath major resistance. The weekly range has tightened considerably, leaving price compressed between support and the 200-day moving average as traders await the next directional break.
The American currency pulled back as traders took some profits off the table near yearly highs.
The USD/JPY eased lower today with the greenback also declining against several other currencies. However, at the time of writing, oil prices were bouncing back and yields were off their lows again.
USDJPY added more value above 157.85 as the drop pressure still overshadows the market as traders expect an intervention from the Bank of Japan. Intraday prices show resistances at 159.00 and 160.00, whilst a drop wave could hit the market toward 156.40 and 153.90.