USD/JPY pulls back as intervention rhetoric rises – OCBC
|The recent rise in USD/JPY is slowing with the pair falling on Friday. Intervention rhetoric is getting louder and more frequent. Pair was last seen at 156.76 levels. Finance Minister Katayama told a news conference after cabinet meeting last Fri that officials are concerned that JPY depreciation is extremely one-sided and rapid, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Katayama signals concern over rapid Yen depreciation
"We believe the risk on leaning against the wind is real if we do see another sharp weakening in the JPY towards the 158-160 zone. A combination of fiscal policy shifts, monetary policy delays, and geopolitical uncertainties are some factors that has underpinned JPY weakness with potential intervention only acting as a limited counterbalance.
"For USD/JPY to reverse trend and trade lower requires policymakers to demonstrate fiscal discipline to restore credibility while the BOJ also need to resume policy normalization. A softer USD should also help. Leaning against the wind activity is not likely to reverse the JPY’s broader depreciation trend though it may moderate the pace of decline."
"Daily momentum is mild bullish while RSI fell from overbought conditions. Support at 154.40/50 levels (21 DMA, 76.4% fibo), 151.60 (61.8% fibo retracement of 2025 high to low, 50 DMA). Resistance at 158, 158.87 (previous high in 2025) and 160 levels."
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.