USDJPY moves into potential intervention territory


USDJPY has hit a new high for 2023, trading near 145.15. Market participants are now looking for potential Japanese government intervention to support the yen. The dollar has been bolstered by higher US yields and concerns over the Chinese property market.

The yen has weakened since the Bank of Japan made changes to its yield control policy in late July, sending the Japanese 10-year to its highest level in 9 years. The BoJ's policy is considered ultra-loose compared with other central banks, weighing heavily on the yen.

In September last year, Japan engaged in Forex market intervention. Japanese authorities subsequently intervened three times. The actions took place as the value of the dollar exceeded 145 yen, which led to the Ministry of Finance (MOF) stepping in. The MOF's response involved purchasing yen to counterbalance this surge and consequently readjusting the currency pair to approximately 140 yen. Notably, the yen has encountered a decline of nearly 10% against the dollar over the course of 2023.

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As such, traders are cautious around current levels.

Scheduled for Tuesday, Japan is set to release its latest figures concerning the gross domestic product for the quarter to June. Furthermore, Fri will see the release of Japanese inflation data.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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