- The Japanese yen has once again weakened past 154 yen to the dollar, giving up last week's gains even after top currency diplomat Masato Kanda said the government is ready to combat disorderly and speculative forex moves.
- However, Kanda declined to confirm whether Japanese authorities were behind last week's suspected intervention when the yen rebounded by as much as 5.2% from its lowest level.
- Now, the USD/JPY exchange rate is stable around the resistance level of 154.60 at the time of writing.
Overall, Bank of Japan data indicates that it spent approximately $60 billion to defend the currency. Meanwhile, analysts said that the move only bought the Japanese authorities some time as market fundamentals remained bearish for the Japanese yen. For her part, US Treasury Secretary Janet Yellen also said over the weekend that interventions should be rare, and consultations should be held, indicating a lack of coordination between Japan and the United States on forex policy.
According to forex trading, the dollar index has stabilized above 105 today, Tuesday, as investors continue to assess the Federal Reserve's monetary policy expectations considering recent central bank comments. New York Fed President John Williams said rate cut decisions would be data-dependent, while Richmond Fed President Thomas Barkin expressed confidence that inflation will fall to 2% as the full effects of higher interest rates take hold. Last week, the dollar index had fallen by about 1% as the Fed kept rates steady and Chairman Powell ruled out raising rates again to combat stubbornly high inflation, reiterating the central bank's bias toward easing despite the timing lag.
According to the results of the economic calendar, the data also demonstrated that the US economy added a total of 175,000 jobs in April, down from the revised 315,000 added in March and below market expectations of 243,000. Currently, markets are pricing in 45 basis points of total cuts this year, with the November move fully priced in.
USD/JPY Technical Analysis and Expectations Today:
As we mentioned before, the continued discrepancy between the US central bank’s strict policy and the Bank of Japan. In addition to the continuation of speculation on the yen, will ensure that bulls control the performance of the price of the US dollar against the Japanese yen (USD/JPY).
Therefore, it is the closest opportunity to return to test the resistance levels of 155.20 and 156.00 until a response. Furthermore, markets and investors reacted to the statements of US Federal Reserve officials throughout this week. Technically, the stronger downward shift in the dollar’s direction against the Japanese yen requires moving towards the support levels of 152.00 and 150.00, respectively.
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