Japanese Yen consolidates as intervention fears, hawkish BoJ keep USD/JPY below mid-156.00s
- USD/JPY lacks firm intraday directional bias as investors reassess Iran-US peace prospects.
- The hawkish BoJ and intervention speculations underpin the JPY, keeping a lid on the pair.
- The divergent BoJ-Fed policy outlooks warrant some caution before initiating bullish bets.
The USD/JPY pair struggles to capitalize on the previous day's goodish rebound from its lowest level since February 24, around the 155.00 psychological mark, and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade just below mid-156.00s, nearly unchanged for the day.
The Japanese Yen (JPY) continues to draw support from speculations that authorities will step in again to prop up the domestic currency and the Bank of Japan's (BoJ) hawkish outlook. In fact, Japan’s Vice Finance Minister for International Affairs and top currency diplomat, Masato Mimura, delivered another round of verbal intervention and reiterated his close watch on foreign exchange markets. This comes on top of JPY intervention reports, which suggested that Japan may have spent as much as ¥5.48 trillion ($35 billion) buying the JPY after the USD/JPY pair surged past the 160.00 psychological mark last Friday.
Meanwhile, Minutes of the March 18-19 BoJ meeting showed board members reaffirmed that further rate hikes remained appropriate if the economic and price outlook was realised. The pace and timing will be determined meeting by meeting based on wages, prices, and the evolving Iran situation, the Minutes revealed further. This marks a significant divergence in comparison to diminishing odds for a rate hike by the US Federal Reserve (Fed), benefiting the lower-yielding JPY. The US Dollar (USD), on the other hand, remains depressed amid hopes for a US-Iran peace deal and also caps the USD/JPY pair.
In fact, US President Donald Trump struck an optimistic tone on Wednesday, saying that negotiations had made progress over the past 24 hours and that Iran wants to make a deal. Adding to this, Axios, citing two US officials, reported that the White House was nearing a deal with Iran on a one-page memorandum of understanding to end the war. The optimism, in turn, is seen undermining the USD's reserve currency status. Investors, however, reassess the likelihood of a possible Iran-US deal amid major disagreements over Iran's nuclear program, holding back traders from placing directional bets on the USD/JPY pair.
Japanese Yen Price Last 7 Days
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 7 days. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.60% | -0.87% | -2.48% | -0.35% | -1.64% | -2.10% | -1.58% | |
| EUR | 0.60% | -0.23% | -1.97% | 0.27% | -1.04% | -1.48% | -0.96% | |
| GBP | 0.87% | 0.23% | -1.72% | 0.51% | -0.79% | -1.24% | -0.72% | |
| JPY | 2.48% | 1.97% | 1.72% | 2.27% | 0.91% | 0.41% | 1.11% | |
| CAD | 0.35% | -0.27% | -0.51% | -2.27% | -1.34% | -1.86% | -1.23% | |
| AUD | 1.64% | 1.04% | 0.79% | -0.91% | 1.34% | -0.39% | 0.07% | |
| NZD | 2.10% | 1.48% | 1.24% | -0.41% | 1.86% | 0.39% | 0.51% | |
| CHF | 1.58% | 0.96% | 0.72% | -1.11% | 1.23% | -0.07% | -0.51% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
