USD/JPY Eyes 160.00, Kanda Warns Market

The USD/JPY pair continued its upward trajectory on Friday, closing near session highs at 159.85. This marks the seventh consecutive session of losses for the yen. The yen's sustained weakness is largely due to a significant divergence in yields between Japan and its major peers, notably the US. Despite the Bank of Japan's reluctance to reduce bond buying, traders remain uncertain about when Japan will normalize its policy, which would support the yen.

• USD/JPY opened Friday trading at 159.30, and dipped to an intraday low of 159.15 early before recovering and closing near the day's highs at 159.85, while the BBDXY finished trading up 0.03% at 1,268.09.
• Contributing factors included robust US PMI data, indicating the fastest economic growth in 26 months, which bolstered the Dollar. Meanwhile, the BOJ's recent decision to hold off on clear tapering plans and weaker Japanese inflation data added to the Yen's weakness.
• Technical outlook: The trend signal in USDJPY is unchanged, it remains bullish and the pair has traded higher this week. A number of important short-term resistance points have been cleared. Support - 157.56 (20-day EMA), Resistance 160.17 (Apr 29 high and the bull trigger), 160.92 (1.50 proj of the May 3 - 14 - 16 price swing)
• Japanese top currency diplomat Masato Kanda stated that Japan is ready to take proper steps, including intervention if FX moves are deemed excessive, emphasizing a readiness to act 24 hours a day if necessary, without specific levels for intervention.
• The BOJ's summary of opinions from its June policy meeting, released this morning, will be closely watched for further insights into the BOJ's stance and potential monetary policy adjustments.