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USD/JPY Edges Back above 158.00, Intervention Concerns Remain

JPY
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The USD/JPY ended Wednesday trading up 0.15% at 158.04, remaining above the Ichimoku Cloud and key moving averages, suggesting further upside potential. Despite a lack of catalysts and reduced trading activity due to the Juneteenth holiday in the US, the pair held steady above 158.00.

  • The pair opened Wednesday trading at 157.86, dipped to an intraday low of 157.61, before recovering and closing near the day's highs at 158.04.
  • Technical outlook: The pair’s uptrend remains intact, supported by a bullish RSI at 61, Key resistance levels are 158.26 (June 14 high), and 160.32 (YTD high). Support levels include 156.75 (20-day EMA) and 155.44 (50-day EMA).
  • It should also be noted the conversion line has moved above the base line, this is the fourth time it has happened this year with all four times resulting in a sell-off in the yen, although overnight there were concerns that the BoJ would intervene due to the weakness in the currency, the threat has not vanished and could be enough to halt a another sell-off.
  • Japanese life insurers are reducing their currency hedges, indicating expectations of further yen weakness or limited gains in case of yen appreciation, with the outlook for interest rates and yield differentials continues to weigh on the yen, with insurers favoring unhedged foreign bonds, per bbg.
  • Today, calendar is light with just Investors purchases of Stocks/Bonds to be released.
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The USD/JPY ended Wednesday trading up 0.15% at 158.04, remaining above the Ichimoku Cloud and key moving averages, suggesting further upside potential. Despite a lack of catalysts and reduced trading activity due to the Juneteenth holiday in the US, the pair held steady above 158.00.

  • The pair opened Wednesday trading at 157.86, dipped to an intraday low of 157.61, before recovering and closing near the day's highs at 158.04.
  • Technical outlook: The pair’s uptrend remains intact, supported by a bullish RSI at 61, Key resistance levels are 158.26 (June 14 high), and 160.32 (YTD high). Support levels include 156.75 (20-day EMA) and 155.44 (50-day EMA).
  • It should also be noted the conversion line has moved above the base line, this is the fourth time it has happened this year with all four times resulting in a sell-off in the yen, although overnight there were concerns that the BoJ would intervene due to the weakness in the currency, the threat has not vanished and could be enough to halt a another sell-off.
  • Japanese life insurers are reducing their currency hedges, indicating expectations of further yen weakness or limited gains in case of yen appreciation, with the outlook for interest rates and yield differentials continues to weigh on the yen, with insurers favoring unhedged foreign bonds, per bbg.
  • Today, calendar is light with just Investors purchases of Stocks/Bonds to be released.