Wed, July 24, 2024

USD/JPY Dips 0.03% to 160.77 Near 38-Year Highs

Japanese Yen rallied against U.S. Dollar (Usd/jpy)

Quick Look:

  • USD/JPY dipped 0.03% to 160.77, staying near multi-year highs with a target of 161.00.
  • Resistance at 161.00, 162.00, 164.87, and 178.00; support at 159.01, 158.75, 158.36, and 157.70.
  • Japanese intervention has limited effect; traders remain bullish despite warnings.

The USD/JPY pair experienced minimal losses, dipping slightly by 0.03% to close at 160.77. Despite reaching a daily low of 160.28, the pair continues to hover near multi-year highs, aiming for a target of 161.00. This slight dip does not significantly alter the broader market sentiment, which remains bullish as traders anticipate further upward movement in the near term.

USD/JPY Resistance at 161.00, Support at 159.01

The overall uptrend remains robust for the USD/JPY pair, backed by strong buying momentum. Technical indicators suggest that while the uptrend is intact, the Relative Strength Index (RSI) indicates an overbought condition, which may challenge sustained gains. The pair faces resistance at several key levels, including 161.00, 162.00, and 164.87, and a long-term high of 178.00 from April 1986. On the downside, support is expected at 159.01, 158.75, 158.36, and 157.70.

Japanese Verbal Interventions Fail as USD/JPY Tops 160.00

Efforts by Japanese authorities to verbally intervene have not successfully curbed the Yen’s depreciation. Traders remain cautious but firm after the USD/JPY pair surpassed the key psychological level of 160.00. Statements from Japanese Finance Minister Shunichi Suzuki indicate a readiness to act against excessive currency fluctuations, yet the market has so far shrugged off these warnings. This dynamic highlights the struggle between market forces and governmental efforts to influence currency values.

USD/JPY Hits 161.27, Highest in 38 Years

In recent developments, the USD/JPY pair surged to a new high of 161.27, the highest level seen in 38 years. Economic data from Tokyo showed an increase in the year-over-year inflation rate to 2.3%, up from the previous period’s 2.2%. This inflationary pressure adds another layer of complexity to the current economic landscape. Meanwhile, US Treasury yields have remained elevated, with the 2-year yield at 4.72% and the 10-year yield at 4.30%. These high yields contribute to the USD’s strength against the JPY.

Fed Comments Keep USD/JPY Outlook Balanced

Federal Reserve commentary continues to play a crucial role in market expectations. Fed member Michelle Bowman suggested that current policies are sufficient to meet inflation targets, though she noted that further rate cuts remain possible if necessary. This balanced approach aims to reassure markets while keeping options open. Additionally, projections for the Core PCE Price Index have been adjusted, with the previous rate at 2.8% and a new projection of 2.6%. These factors collectively influence the USD/JPY pair’s trajectory and will be closely watched by market participants.

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