USD/JPY aims to re-test 141.00 as odds of BOJ’s further intervention escalate, US PMI eyed


  • USD/JPY is expected to drag again towards 141.00 as BOJ could intervene in currency markets again.
  • BOJ believes that the current yen price doesn’t justify its fundamentals.
  • A sell-off in the DXY from a two-decade high of 111.81 has weakened the overall bullish structure.  

The USD/JPY pair is displaying back-and-forth moves in a narrow range of 142.27-142.58 in the Tokyo session. The asset displayed a pullback move after hitting a low below 141.00. The major is expected to re-test the cushion of 141.00 as the Bank of Japan (BOJ) could intervene further in the currency markets to support yen.

BOJ’s decision for an intervention in the currency markets for the first time after 1998 dragged the USD/JPY pair dramatically below 141.00. Being the world’s second-largest FX reserve, the BOJ holds sufficient ammunition to continue supporting yen. The central bank decided to intervene to halt the continual depreciation of the Japanese yen as it believes that the current price doesn’t justify the fundamentals.

The intervention move in the currency market by the BOJ came after the announcement of the monetary policy. BOJ Governor Haruhiko Kuroda continued its dovish stance on interest rates and cited that the hawkish Federal Reserve (Fed) policy won’t have any impact on Japan’s economic situation. He also cited that further policy easing is crucial for the Japanese economy as it is still recovering from the impact of the Covid-19 pandemic.

While the US dollar index (DXY) has continued to remain sideways around 111.30 as investors are awaiting for volatility cool-off post the extreme hawkish Fed policy to make an informed decision. Selling interest shown by the DXY on Thursday after hitting a fresh two-decade high of 111.81 has demolished the overall bullish structure.

Going forward, the S&P Global PMI data will be of utmost importance. The Manufacturing PMI is seen lower at 51.1 vs. the prior release of 51.5. While the Services PMI will improve to 45.0 against the prior print of 43.7.

USD/JPY

Overview
Today last price 142.
Today Daily Change -0.06
Today Daily Change % -0.04
Today daily open 142.36
 
Trends
Daily SMA20 141.93
Daily SMA50 138.04
Daily SMA100 135.33
Daily SMA200 127.06
 
Levels
Previous Daily High 145.9
Previous Daily Low 140.35
Previous Weekly High 144.96
Previous Weekly Low 141.66
Previous Monthly High 139.08
Previous Monthly Low 130.4
Daily Fibonacci 38.2% 142.47
Daily Fibonacci 61.8% 143.78
Daily Pivot Point S1 139.84
Daily Pivot Point S2 137.32
Daily Pivot Point S3 134.29
Daily Pivot Point R1 145.4
Daily Pivot Point R2 148.43
Daily Pivot Point R3 150.95

 

 

 

 

 

 

 

 

 

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