USDJPY Hits Record Highs - Still No Intervention
USDJPY Breaks Out
USDJPY has broken out to its highest level today since 1986 as the heavy depreciation of the Yen continue to develop. We’ve heard plenty of warnings from Japanese officials in recent days and weeks signalling their readiness to act against excessive USD strengthening, however, the move continue for now.
US NFPs Due
With the headline US labour market update due on Thursday there is a lot of speculation that the BOJ is waiting to see those results before it takes any action. If the data shows fresh strength in the US jobs market, this will see 2026 Fed rate hike expectations rise again, driving fresh buying in USD, with the BOJ expected to sell USD into that spike.
Thursday Intervention Risks
On the other hand, if the data comes in below forecasts, this should fuel a cooling of rate-hike expectations, leading USD lower. In this scenario, the BOJ might opt to hold off from intervention, depending on the scale of the move lower, or use the sell off as an opportunity to drive amplified USD selling via FX reserve sales. Either way, Thursday looks to be a strong candidate for Japanese authorities to fulfil their recent warnings and take action to help strengthen the Yen. The question, as always though, is whether the BOJ can chieve anything beyond a short-term spike in JPY? In order to do so, it might take a more co-ordinated approach than simply selling USD raising the risk of an out-of-meeting rate adjustment.
Technical Views
USDJPY
The rally in USJDPY has seen the pair breaking out above the 161.95 level with price now trading at fresh highs. Momentum studies are bullish here, keeping the focus on further upside. If we do turn back below 161.95, 160.49 will be the key support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.