The Yen gave back some of its recent advance that was triggered by US and Japanese intervention. USDJPY managed to print above the 158.05 resistance which indicates a wider range for rebound towards the 160.85 resistance.
USD/JPY bulls continue to bid dips and we saw that again after the surprise announcement of increased Treasury buybacks. And while the Japanese Yen is just 13.6% of the DXY basket, given that the USD/JPY pair is still more than 50% above the early-2021 level there's still the illustration of a crowded long trade.
The American currency attempts to gain upside momentum as PMI data points to strong economy.
USD/JPY faces rejection at 0.382 Arc – Potential decline toward 158.00
USD/JPY Price Forecast: 20-day EMA remains key hurdle
The USD/JPY exchange rate climbed back above 159.00 on Thursday as renewed weakness in the Japanese yen combined with a recovery in the US dollar.As of writing, USD/JPY is trading around 159.03, according to the latest chart, after recovering sharply from the August selloff that briefly pushed the pair below 157.00. The rebound comes as US Treasury yields move higher again following their initial decline after the Treasury Department announced plans to increase buybacks of longer-dated government debt.
The American currency is moving higher as traders buy the dip.
The US dollar has come under moderate pressure as long-term US Treasury yields have declined. Another factor has been the US Treasury Department's decision to increase buyback operations for securities with maturities ranging from 10 to 30 years in an effort to support market liquidity.
The US dollar suffered its sharpest decline in three weeks after increased Treasury buybacks drove long-end yields lower. With DXY breaking support and USD/JPY turning lower again, traders are watching whether the move has further to run.
USD/JPY retreated to a familiar area today with the 158 zone quickly coming back into play. This broke a streak of higher-lows and the pair was stepping closer to the 160.00 level before the pullback appeared.
The American currency is under strong pressure as traders react to U.S. Treasury announcement.