USDJPY:
USDJPY is holding near 163.80 after the yen weakened to an almost 40-year low, although the fundamental case for further gains has become less one-sided. Japan’s finance minister stated that the authorities were prepared to take decisive action in the foreign exchange market, while the US Treasury highlighted the undesirability of excessive volatility and the need for further steps from the Bank of Japan.
Only for our readers: mention the one-time promo code MR20 in the support chat and get +20% on your next deposit of any amount. The maximum bonus amount is $500. Only one promo code can be applied to a deposit at a time.
Support for the dollar remains substantial. The yield on the 10-year US Treasury note is above 4.7%, Federal Reserve expectations have become more restrictive, and oil prices above $100 are increasing inflation and import-related risks for Japan. The interest rate differential continues to weigh on the yen, meaning that verbal warnings alone may not be enough to produce a sustained recovery.
However, the current session is marked by a fresh official signal and the exchange rate’s proximity to levels at which the likelihood of practical action by the Japanese authorities rises considerably. The dollar’s additional upside is limited by the risk of a sharp reduction in interest rate differential trades, while any response to intervention could be swift. The local Japanese factor may therefore outweigh the broader dollar impulse, and the baseline scenario allows for a decline in USDJPY.
Trading idea: SELL 163.80, SL 164.15, TP 162.95
Connect Drawdown bonus 101% and trade with double your deposit! Bonus funds will help you increase your profits or withstand a sudden drawdown!
Comments
Log in or sign up to join the conversation.