April 26, 2024 08:45 GMT
Sharp USDJPY Spike Lower Supported at 155.00, Intervention Speculation Lingers
FOREX
- The sharp move lower in USDJPY at 0900BST/0400ET sparked immediate fears of potential MOF intervention, exacerbating the selloff through session lows to eventually print 154.99.
- 155.00 had been capping the price action earlier this week and appears to have acted as solid support, with no headlines hitting the newsfeeds related to the central bank stepping in to stem the JPY’s rapid decline.
- Supporting this thesis, the reversal higher has been equally impressive with USDJPY slowly gaining lost ground to trade back around 156.50, while the likes of EURJPY, AUDJPY and GBPJPY all test new session highs.
- As a reminder, Bank of Japan Governor Kazuo Ueda said on Friday the yen's recent weakness has not affected underling inflation, which the Bank continued to watch closely.
- “The BOJ isn’t targeting foreign exchange rates but we are closely watching developments of forex rates and their impact on economic activity and prices,” Ueda told reporters. Should the underlying trend change as a result of the weak yen, the BOJ will change monetary policy, he added without elaborating on timing.
- For USDJPY, the next topside level is at 157.65, the 2.236 projection of the Feb 1 - 13 - Mar 8 price swing. Initial support is at 154.46, the Apr 22 low.
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