USD/JPY faces sell-off near 152.00 as BoJ’s stealth intervention hopes deepen
|- USD/JPY drops from 152.00 as expectations for BoJ’s intervention deepen.
- The Japanese Yen remains weak despite BoJ exiting negative interest rates.
- The US Dollar exhibits strength ahead of the US core PCE Inflation data.
The USD/JPY pair finds intense selling pressure near historic highs of 152.00 in Wednesday’s late American session. The asset falls sharply after Japan’s Finance Ministry reported that The Bank of Japan, Ministry of Finance (MoF) and Financial Services Agency (FSA) are scheduled to hold a tri-party meeting.
This has deepened hopes of a stealth intervention by Japanese authorities into the FX domain to limit further downside in the Japanese Yen. Also, commentary from top currency diplomat Masato Kanda that he "won't rule out any steps to respond to disorderly FX moves" has reinforced expectations of Japan’s intervention against excessive currency moves.
The Japanese Yen has faced significant pressure in the last few trading sessions despite the BoJ exiting negative interest rates. It appears that investors are less confident about the BoJ’s move to policy normalization due to the absence of evidence about a wage growth spiral. Apart from that, investors hope that the BoJ’s move to further policy normalization will be very slow.
Meanwhile, the US Dollar is upbeat ahead of the United States core Personal Consumption Expenditure Price Index (PCE) data for February, which will be published on Good Friday. Trading volume is expected to remain low in that session as US equity and bond markets will remain closed.
The annual core PCE inflation is estimated to have grown steadily by 2.8%, with monthly growth declining to 0.3% from 0.4% in January. The US Dollar Index (DXY) is far from recapturing the monthly high of 104.50.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.