USD/JPY: Intervention risk on the rise – OCBC

FXStreet Insights Team FXStreet

USD/JPY continued to trade near elevated levels. Fiscal concerns, a delay in BOJ policy normalization and USD strength are some of the factors that continued to underpin Japanese Yen (JPY) weakness. PM Takaichi has approved stimulus of JPY17.7tn, much higher than the JPY13.9tn last year. Pair was last seen at 157.40 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum turns mild bullish

"PM Takaichi had signalled her intent to ramp up the active use of fiscal policy to power economic growth. By dropping the annual budget-balancing goal and moving towards multi-year budget frameworks, with a preference for net debt-toGDP targets rather than gross debt, the government is signalling greater fiscal flexibility. This approach potentially allows for increased bond issuance to finance expansive fiscal spending."

"Leaning against the wind activity is not likely to reverse the JPY’s broader depreciation trend though it may moderate the pace of decline. A combination of fiscal policy shifts, monetary policy delays, and geopolitical uncertainties are some shifts that can underpin JPY weakness with potential intervention only acting as a limited counterbalance."

"Daily momentum turned mild bullish while RSI shows tentative signs of turnaround from overbought conditions. Resistance at 158, 158.87 (previous high in 2025) and 160 levels. Support at 154.40 (21 DMA, 76.4% fibo), 151.60 (61.8% fibo retracement of 2025 high to low, 50 DMA)."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.