USD/JPY: Intervention risks rise near 160 – OCBC

FXStreet Insights Team FXStreet

OCBC strategists Sim Moh Siong and Christopher Wong note that USD/JPY is again approaching 160 as the US Dollar (USD) benefits from safe-haven flows and Japanese authorities reiterate intervention readiness. Their base case is a 25bp Bank of Japan (BoJ) hike to 1.0% on 28 April, but they warn that a hawkish hold or failure to hike could push USD/JPY higher and trigger Ministry of Finance (MoF) action.

BoJ hike doubts and MoF threat

"USD/JPY is approaching 160 again, sharpening focus on whether the BoJ can avoid looking behind the curve. Our base case remains a 25bp hike to 1.0% on 28 April, although markets are pricing a meaningful risk of a hawkish hold."

"Failure to hike would likely push USD/JPY into the 160s, increasing the risk of Ministry of Finance intervention aimed at driving the pair back toward 155."

"Meanwhile, the SNB and Japanese authorities reiterated their readiness to intervene to limit CHF strength and JPY weakness."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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 remains sidelined around 1.1600

EUR/USD clings to its decent gains on Monday and continues to move in a consolidative mood around the 1.1600 region. Improved risk appetite following the US-Iran agreement to reopen the Strait of Hormuz continues to weigh on the US Dollar, lending support to the risk complex. Looking ahead, investors are likely to remain on the sidelines ahead of Wednesday's FOMC meeting.

GBP/USD retreats from tops, back to 1.3420

GBP/USD keeps its advance past the 1.3400 yardstick at the beginning of the week. In the meantime, Cable continues to draw support from improved market sentiment following reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold stays firm, still below $4,400

Gold builds on its recent gains on Monday, climbing well north of the $4,300 mark per troy ounce. The yellow metal benefits from renewed selling pressure on the Greenback as investors reassess the implications of the US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Market participants now turn their attention to Wednesday's FOMC gathering.