- USD/JPY retreats sharply from a fresh 24-year peak after Japan intervenes in the FX market.
- The intraday USD corrective pullback from a two-decade high contributes to the steep decline.
- Rising US bond yields, the Fed-BoJ policy divergence limits any further losses, at least for now.
The USD/JPY pair witnessed a dramatic intraday turnaround on Thursday and plunges over 550 pips from the vicinity of the 146.00 mark, or a fresh 24-year high touched this Thursday. The pair maintains its heavily offered tone through the early European session and hits a nearly three-week low in the last hour, though rebounds thereafter.
Japanese authorities intervened in the forex market for the first time since 1998 to stem the rapid decline in the domestic currency and trigger a massive sell-off around the USD/JPY pair. The strong intraday rally in the Japanese yen gives the US dollar bulls the chance to take some profits off the table, especially after the recent strong run-up to a two-decade high. This was seen as another factor that aggravated the bearish pressure surrounding the major.
That said, a recovery in the risk sentiment, as depicted by a generally positive tone around the equity markets, should keep a lid on any further gains for the safe-haven JPY. Apart from this, a fresh leg up in the US Treasury bond yields, bolstered by a more hawkish stance adopted by the Federal Reserve, supports prospects for the emergence of some USD dip-buying. This, in turn, assists the USD/JPY pair to rebound over 100 pips from the daily low.
It is worth recalling that the Fed raised interest rates by another 75 bps on Wednesday and signalled more large rate increases at its upcoming policy meetings. In contrast, the BoJ left its policy settings unchanged and reiterated that it will continue powerful monetary easing. This marks a big divergence in the Fed-BoJ policy outlooks, which has been a key factor behind the yen's slump of over 25% against its American counterpart since the beginning of 2022.
Technical levels to watch
|Today last price||140.72|
|Today Daily Change||-3.33|
|Today Daily Change %||-2.31|
|Today daily open||144.05|
|Previous Daily High||144.7|
|Previous Daily Low||143.34|
|Previous Weekly High||144.96|
|Previous Weekly Low||141.66|
|Previous Monthly High||139.08|
|Previous Monthly Low||130.4|
|Daily Fibonacci 38.2%||144.18|
|Daily Fibonacci 61.8%||143.86|
|Daily Pivot Point S1||143.36|
|Daily Pivot Point S2||142.67|
|Daily Pivot Point S3||142|
|Daily Pivot Point R1||144.72|
|Daily Pivot Point R2||145.39|
|Daily Pivot Point R3||146.08|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.