USD/JPY trades close to 150.00, fears of intervention remain intact

The USD/JPY pair consolidates in a narrow range near the crucial resistance of 150.00. The upside in the asset seems upbeat as investors hope that the Federal Reserve (Fed) will keep the interest rate policy tight for a long period if not discuss raising interest rates further.

S&P500 futures generated losses in the European session, indicating a risk-off mood amid Middle East tensions. US equities were heavily sold on Friday amid geopolitical tensions and tech earnings report. The 10-year US Treasury yields rose to 5% ahead of crucial economic data.

The US Dollar Index (DXY) consolidates above 106.00 as investors shift focus to the US Q3 Gross Domestic Product (GDP) data, which will be published on Thursday. The annualized GDP data is seen higher at 4.1% despite higher interest rates by the Fed.

On the Fed’s interest rate outlook, Fed Chair Jerome Powell endorsed a stable interest rate policy amid higher long-term US Treasury yields. Jerome Powell commented that higher yields are impacting current financial conditions. Philadelphia Fed Bank President Patrick Harker, in an interview on Friday, favored holding interest rates as the economy is softening than thought.

On the Japanese Yen front, investors watch out for intervention by the Japanese authority in the FX domain to provide support to the weakening Yen. Investors hope that the stealth intervention won’t be able to provide longer stability to the Japanese Yen as the tide is against the currency due to the maintenance of the expansionary policy stance by the Bank of Japan (BoJ).