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USD/JPY Pushes Through 2022 Intervention Level, As US Yields Climb Further


USD/JPY spent most of the post Asia close on the front foot, particularly during NY trade. We got to 146.40 late in the NY session, but track slightly lower now, last near 146.25. This left yen the second worst performer in the G10 space for the session, down -0.53%, as the USD continued to rebound (only GBP rose for Wednesday's session), with the BBDXY up a further 0.23%.

  • USD/JPY is through intervention levels from September last year and focus remains on upside momentum. The pair stopped around the 146.38 level on Wednesday, a Fibonacci projection. Above here, the notable target levels are 146.59, the Nov 10 2022 high, and 147.49, a Fibonacci projection level.
  • The yen suffered as US yields rose further, amid somewhat hawkish Fed minutes and positive US data surprises. US-JP 10yr swap spreads continue to widen, comfortably above +300bps. In NEER terms (J.P. Morgan Index) the JPY is around multi-decade lows, see the chart below.
  • This is likely to keep intervention risks in focus, while we also have a busy data calendar today. July trade data is on tap, along with June machine orders, as well as weekly investment flow data. Later on, the tertiary activity index prints.

Fig 1: JPY NEER Close To Multi-Decade Lows

Source: J.P. Morgan/MNI - Market News/Bloomberg

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