USD/JPY Slides as Verbal Intervention Takes Hold

  • USDJPY
    (${instrument.percentChange}%)

USD/JPY Analysis

The pair pauses its 10-day rally, which led to 24-year highs and sparked a series of verbal interventions by Japanese officials. Earlier today, Bank of Japan Governor Mr Kuroda warned that "sharp currency moves are undesirable" [1] according to Reuters, but no action has be taken so far.

Meanwhile markets continue to expect another outsized move by the Fed and Chair Powell stuck to the script yesterday, vowing to "act now forthrightly strongly as we have been doing and we need to keep at it until the job is done". [2]

The greenback eases today though and USD/JPY loses more than 1% at the time of writing, breaking below the EMA100 and the 142.49 level we had mentioned in our previous analysis. This creates risk for further correction towards 139.40-138.83, but fresh catalyst will likely be required for a breach.

This includes the 38.2% Fibonacci of the rise from August, above which the any decline is viewed as shallow correction that allows for higher highs. The current pullback is already oversold in the short-term and bulls have not lost broader control. As such we can see a push for 144.99, although 147.90 has a higher degree of difficulty at this stage.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 09 Sep 2022 https://www.reuters.com/world/asia-pacific/japan-finmin-says-no-options-ruled-out-forex-boj-kuroda-meets-pm-2022-09-09/

2

Retrieved 25 Jun 2024 https://www.cato.org/events/40th-annual-monetary-conference

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}
Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.