Japanese intervention underway, USD/JPY is pressured towards key support
The Japanese authorities are off the marks early doors in Asia today with verbal intervention aimed to tame the rally in USD/JPY and in order to put psychological pressure on speculative long plays.
Reuters reported that ''Japan would firmly respond to any excessive currency fluctuations, its top currency diplomat Masato Kanda said, following the yen's sharp fall to a 32-year low to the dollar.
Each country would respond appropriately to an agreement on foreign exchange market moves by the Group of Seven (G7) and G20 meetings last week, he said.''
Japan's Finance Miniter Shun'ichi Suzuki has also stepped in and said that they will take decisive action against excess forex moves based on speculation.
Suzuki says they are constantly watching fx movements with a sense of urgency.
USD/JPY is subsequently under pressure ahead of the open and fix in Tokyo. At the time of writing, the pair is trading at 148.50 and has printed a low of 148.41 from 148.71 the high of the day. The bull cycle high was set last Friday at 148.85. Below 148.40/50, there will be prospects of a retracement to 147.80. However, so far, the acts of verbal intervention, or physical, have fallen on deaf ears in the markets and have only a momentary impact, therefore, a break of the highs opens risk into he the 150s:
(USD/JPY H1 chart)
(USD/JPY M5 chart)
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
