USD/JPY: Verbal warnings cap upside near 160.00 – MUFG

FXStreet Insights Team FXStreet

MUFG’s Senior Currency Analyst Lee Hardman highlights that USD/JPY is stalling just below 160.00 as Japan’s Finance Minister Katayama escalates verbal intervention, stressing readiness to respond at any time. Authorities argue recent Yen moves are misaligned with fundamentals, though the roughly 2% Yen decline since the Middle East conflict broadly matches US Dollar gains versus other G10 currencies.

Japanese officials raise intervention threat

"USD/JPY has continued to trade just below the 160.00 overnight hitting a high of 159.49. The pair has temporarily stalled at just below 160.00 reflecting renewed concerns over the risk of intervention to support the yen, and a broader loss of upward momentum for the US dollar yesterday. The dollar index dropped back below 100.00."

"Finance Minister Katayama has stepped up verbal intervention at the start of this week. She stated overnight that “there has been significant volatility across financial markets overall” while suggesting that the moves in the yen have not been aligned with fundamentals for a while, adding that the deviation appears particularly significant at present."

"She then warned that “considering the impact exchange rates have on people’s daily lives, we are fully prepared to respond at any time”. It follows on from her comments yesterday that they are ready to take “bold action” if needed."

"The comments in recent days have cast doubt on the view that was building among market participants that Japanese policymakers may be more tolerant to allow the yen to weaken in the near-term in response to the negative energy price shock."

"The yen has weakened by around 2% against the US dollar since the Middle East conflict began. The scale of the sell-off is broadly in line with US dollar strength against other G10 currencies highlighting that the recent yen sell-off is not an outlier."

(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.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.