USDJPY settles around 156 following likely intervention
The Japanese yen hit a 34-year low against the dollar on Monday before rebounding, amidst speculation of official intervention. Thin trading in Japan due to Shōwa Day saw the USD/JPY swiftly rise, reaching its weakest level against the dollar since 1990. This year, the USD/JPY has gained around 12%, driven by widening bond yield differentials. While US 2-year Treasury yields rose by 75 basis points to 5%, Japan's 2-year bond yields remain at 0.3%, with the Bank of keeps borrowing costs steady at 0.1%. Japanese authorities have hinted at intervening to support the yen, which briefly fell to 155 before stabilizing around 156.80. Despite speculation, officials refrained from commenting on intervention. Japan's top currency official, Masato Kanda, declined to confirm intervention, stating, "No comment for now." Whilst intervention may have occurred, its impact is likely to be short-lived. The USD/JPY pair remains sensitive to US 10-year yields, favouring the dollar.
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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