The Japanese yen jumped sharply on Thursday as traders braced for a potential intervention by the Bank of Japan (BoJ). The USD/JPY pair retreated to a low of 160.62 from the year-to-date high of 162.84.
The American currency found itself under pressure as traders reduced bets on hawkish Fed.
USD/JPY forex pair has been on a steady climb since May and the decline before NFP data release is likely temporary.
USD/JPY Price Forecast: Dollar finds support at previous resistance area around 161.00
Out of the blue, the Japanese yen recovered sharply by 0.5% against the US dollar on Thursday, 2 July 2029, at 2 pm SG time (the Asian-to-London handover period).
The US dollar found no clues in Kevin Warsh's comments, and attention shifted to the US labour market report for June. The Fed Chair noted a reduction in inflationary risks and reaffirmed the central bank's commitment to bringing inflation back to the 2% target.
Intraday analysis covering USDJPY(The Yen) , NZDUSD , and SPX 500 , highlighting recent price movements, key technical levels, and short-term momentum shifts across major markets. USDJPY sinks lower USDJPY(The Yen) clawed back losses after prices fell away from its recent peak.
Implied volatility for USD/JPY has surged ahead of today's nonfarm payrolls (NFP) report, which is hardly surprising given its importance for Fed policy expectations and the potential for currency intervention by Japan's Ministry of Finance (MOF). With the one-day implied volatility band sitting at 233% of its 20-day average, the options market is pricing a move of around 111 pips in either direction for USD/JPY.
USD/JPY has extended its breakout from the June range, with bullish momentum carrying the pair to fresh multi-month highs despite increasingly vocal intervention warnings from Japanese officials. Weekly momentum continues to strengthen, but the rally is now approaching a major technical resistance zone where buyers will face their next meaningful test.
EU inflation data put material pressure on the European currency and provided some support to the U.S. dollar.
The USD/JPY remains in intervention territory above 160.00. and two risk events have the potential of testing the BoJ's will in this regard.
USDJPY managed to pass above the short-term resistance zone of 161.95 which shows a strong advance still ongoing. Traders should take Precautionary measures as the Bank Of Japan could intervene any time in the market.