Japanese Yen Ticks Up As Nervy USDJPY Hovers Around Intervention Levels

Japanese Yen (USD/JPY) Analysis and Charts

• USD/JPY is conscionable a shadiness beneath 162.000
• These are 38-Year Highs for the Dollar
• While the Yen lacks cardinal support, the method present looks precise stretched

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The Japanese Yen remains adjacent to forty-year lows against the United States Dollar connected Thursday. However, it has inched up done the session, with a tense marketplace wondering however overmuch little it tin spell without attracting immoderate much authoritative attention.

The authorities successful Tokyo intervened to prop their currency up successful May erstwhile it past spiked up to existent levels. However, the marketplace was past thinned by a section holiday, expanding the action’s impact. There hasn’t been immoderate motion of a repetition truthful acold but traders look reluctant to propulsion USD/JPY overmuch higher. Note, though, that the latest emergence has been much orderly and so, perhaps, little apt to spot Tokyo measurement in.

Of course, interest-rate differentials inactive favour the greenback and, indeed, conscionable astir everything other against the Yen. That volition stay truthful adjacent if US involvement rates are apt to autumn this year.

The Bank of Japan gingerly exited its decades-long zero-interest complaint argumentation successful March acknowledgment to signs that long-dormant section inflation was astatine past internally generated alternatively than simply a relation of planetary trends. But the Yen won’t spot genuinely competitory involvement rates for a precise agelong clip if so it ever does. The BoJ whitethorn tighten its monetary settings again astatine the extremity of this period fixed resilient ostentation and immoderate upbeat sentiment from large Japanese companies successful the latest important ‘Tankan’ survey.

However, portion the fundamentals volition proceed to favour the Dollar for immoderate time, the method representation for USD/JPY is starting to look overstretched, arsenic we volition spot below.

There’s thing overmuch connected the Japanese information calendar apt to determination the currency this week, which volition permission USD/JPY similar astir different markets hunkered down for Friday’s important authoritative labour marketplace data.

Japanese Yen Technical Analysis

USD/JPY Daily Chart Compiled Using TradingView

The wide uptrend successful spot for each of this twelvemonth looks precise overmuch entrenched, with a narrower, near-term transmission from the commencement of June besides not evidently threatened.

However, USD/JPY present looks unsurprisingly overbought to justice by its Relative Strength Index. That’s hovering astir the 70-level which suggests immoderate froth astatine the apical of the market. Perhaps much worryingly for Dollar bulls, the brace is present adjacent to an astonishing 40 afloat Yen supra its 200-day semipermanent average.

With some of these successful mind, it’s surely arguable that the way of slightest resistance. Reversals could find enactment astir the 20-day moving mean which is overmuch person to the marketplace present astatine 158.52. Before that comes transmission enactment astatine 159.11.

--By David Cottle for DailyFX