Rising demand for safe-haven assets provided support to the American currency.
Recent sessions have been marked by heightened volatility in USD/JPY, as the pair has posted a decline of more than 2.11% on average over the last three trading days, reflecting a notable bearish bias that had not been seen in several months and highlighting a meaningful recovery in favor of the Japanese yen.
USDJPY managed to hit a fast drop after the Bank of Japan threatened to intervene in the market to back up the currency. As we see from the chart, prices managed to test the trend support around 155.60 which could lead to a trading zone towards the resistance at 157.50-70.
Intraday forex analysis covering USDJPY, EURGBP, and S&P 500 analysis with a focus on key market movements, support and resistance levels, and short-term price action trends across major currency pairs. USDJPY hits multi-week low The US dollar turned lower as price action approached the psychological level of 155.00.
The Japanese yen was largely unchanged on Monday morning as investors reacted to last week's intervention by the Bank of Japan (BoJ). The USD/JPY exchange rate was trading at 158 on Monday, down from last week's high of 160.
After breaking above 160, USD/JPY fell sharply as Japanese officials warned that intervention could be near. Market rumors also suggested that authorities had been calling banks to check market conditions before possible yen-buying action.
Thin liquidity defined the Asia-Pacific session on Monday with Japan and mainland China both out for public holidays. USD/JPY saw some early volatility before the pair spent the remainder of the session drifting modestly higher.
USD/JPY consolidates near 157.00 as Iran tensions counter suspected JPY intervention
Interest rate expectations are shifting as oil-driven inflation and yen intervention risk reshape USDJPY, EURJPY, and GBPJPY, while the Fed, ECB, BOE, and BOJ face new policy pressure.
The Dollar to Yen (USD/JPY) exchange rate traded at 157.07, holding below recent highs after failing to sustain gains above the 160 level amid intervention risks and shifting policy expectations. Rabobank notes that the Japanese Yen remains one of the weakest G10 performers this year, with the currency still widely used as a funding.
We've entered a new regime where the threat of intervention is dominating USD/JPY, not movements in energy prices, with extended holidays in Japan, thin liquidity, and a heavy slate of US data all colliding to leave the potential for significant volatility. With nonfarm payrolls data out Friday, the near-term effectiveness of suspected intervention by the Bank of Japan (BOJ) will be put to the test.
Well, they finally did it. The Bank of Japan intervened in markets on Thursday morning and drove a sell-off of more than 400 pips in the USD/JPY pairv.