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USD/JPY Battles a Recent 24-Yr Excessive because the Japanese Yen Continues to Hunch


US Greenback Worth and Chart Evaluation

  • USD/JPY testing vital resistance.
  • BoJ might step in once more to prop up the Yen.

The Japanese Yen is again within the headlines once more because it slumps additional towards the US greenback. The pair at the moment are testing the 145.90 degree, and a break increased would see USD/JPY commerce at ranges not seen since August 1998. The Financial institution of Japan final intervened within the FX market on September 22, when USDJPY was buying and selling round 145.70, shopping for roughly $21 billion of Yen to stabilize the forex. The Japanese central financial institution’s motion drove the USD/JPY again right down to round 140.00 earlier than the market determined to check the BoJ once more and pushed the pair again increased. The Japanese Yen has been weakening towards a sturdy US greenback ever since.

Financial institution of Japan (BoJ) – International Trade Market Intervention

US Treasury yields, a driver of US greenback energy, proceed to maneuver increased on expectations that the Federal Reserve will keep on mountaineering US charges aggressively. The UST 2-year is presently buying and selling with a yield of 4.36%, a degree final seen in August 2007.

US Treasury 2-Yr Yield Month-to-month Chart October 11, 2022


If the Financial institution of Japan decides to face again from the FX market at these ranges, USD/JPY can simply transfer to check the August 1998 excessive at 147.63. If this degree is damaged, discovering resistance from charts going again over 20 years turns into tough with solely the 150 ‘huge determine’ degree protruding. The Japanese Yen has depreciated over 25% towards the greenback this 12 months and US authorities can be eager to see this depreciation halt to forestall Japan from getting an excessive amount of of a commerce benefit on account of its weak forex. It could be that we’re nearing the USD/JPY excessive.

USD/JPY Day by day Worth Chart – October 11, 2022


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Retail dealer information present that 20.64% of merchants are net-long with the ratio of merchants quick to lengthy at 3.85 to 1.The variety of merchants net-long is 10.57% increased than yesterday and seven.21% increased from final week, whereas the variety of merchants net-short is 6.16% increased than yesterday and 10.81% increased from final week.

We sometimes take a contrarian view to crowd sentiment, and the very fact merchants are net-short means that USD/JPY costs might proceed to rise. Positioning is much less net-short than yesterday however extra net-short from final week. The mix of present sentiment and up to date modifications offers us an extra blended USD/JPY buying and selling bias.

What’s your view on the USD/JPY – bullish or bearish?? You possibly can tell us by way of the shape on the finish of this piece or you possibly can contact the writer by way of Twitter @nickcawley1.

DailyFX gives foreign exchange information and technical evaluation on the tendencies that affect the worldwide forex markets.

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