USD/JPY nears intervention levels as pair breaches 155 – ING
|USD/JPY continues to climb in a low-volatility, risk-on environment, briefly breaching 155.0. Japan’s Ministry of Finance has issued cautionary signals, hinting at potential intervention, though strategists suggest verbal warnings may persist until US data resumes, leaving the pair poised to test 156-157 in the coming weeks, ING's FX analyst Francesco Pesole notes.
Japan signals FX vigilance amid USD strength
"Japanese officials probably hope we are right, as USD/JPY continues to creep higher in the low-volatility, risk-on environment. The pair briefly breached 155.0 yesterday, as Japan’s Ministry of Finance continues to send warning signs. We definitely are entering FX intervention territory, but even if intervening is the plan, there is an argument for the MoF to wait until US data releases resume."
"Remember, in July of last year, the MoF surprisingly intervened after a sharp slowdown in US inflation, seemingly shifting strategy: intervening in a USD/JPY market-induced selloff, rather than in a rally. If our intuition is right, and the MoF sticks to mere verbal intervention for now, markets may keep testing the upside tolerance band at 156-157 in the next couple of weeks."
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.