Results for: USD/JPY

As of early evening in Tokyo, Japanese officials have remained conspicuously silent amid the steady rise of USD/JPY. This unusual lack of verbal intervention has raised expectations that the Japanese government may be hoping traders will interpret the quiet as a warning and refrain from pushing the currency pair beyond 155.00. The silence has contributed to a relatively muted day in broader markets, with the dollar holding steady against the euro and pound and European indices showing only marginal gains.

Traders remain cautious in the foreign exchange market, particularly regarding the USD/JPY pair. Speculation about potential intervention by the Bank of Japan (BOJ) is deterring aggressive activity, as traders await further guidance on Friday. The Australian dollar (AUD) has made slight gains, but AUD/USD remains limited. Analysts advise caution due to the high risk associated with yen trades. As traders observe the market, a gradual rise in prices is expected, potentially reaching 155.00. However, profit-taking and a possible overshoot could trigger intervention by Japan.

UBS has adjusted its outlook for the USD/JPY currency pair, attributing the change to the robust performance of the US dollar. The firm has increased its quarter-end predictions for the pair to ¥155 for June 2024, followed by ¥152, ¥148, and ¥145 for the subsequent quarters through March 2025. This revision comes as the market recalibrates its expectations for Federal Reserve rate cuts, which have been scaled back significantly. Additionally, UBS notes that short positions in the yen have reached extreme levels, contributing to the dislocation of the USD/JPY pair.

As the North American trading session commences, the British pound (GBP) has emerged as the strongest among the major currencies, while the New Zealand dollar (NZD) languishes at the bottom. The US dollar (USD) has generally trended lower since the start of the session. Meanwhile, in the currency markets, USD/JPY has surged to levels last seen in 1990, approaching the 155.00 mark. The current price hovers slightly below this level at 154.78.

In Europe, flash PMI data released today painted a generally positive picture, with most countries exceeding expectations. The United States is set to release its final PMI estimates at 9:45 AM ET, projecting a 52.0 reading for manufacturing (up from 51.9 last month) and 52.0 for services (compared to 51.7 previously).

Later in the day, at 10 AM ET, the US will unveil its new home sales figures, with analysts expecting a rise to 668K from the previous month’s 662K. Additionally, the Richmond Fed manufacturing index is anticipated to improve from -11 last month to -7 (also due at 10 AM ET).

The flow of corporate earnings reports picks up steam today, with Tesla, Visa, and Texas Instruments set to announce their results after the market closes. Several companies have already released their numbers this morning.

Despite strong comments from Japanese officials, the USD/JPY currency pair remains relatively unchanged, hovering around 154.70 levels. While Japanese bond yields are rising, they are not significantly impacting USD/JPY. Buyers are exercising caution until a key trigger emerges. This week could potentially bring significant volatility if such a trigger materializes.

Goldman Sachs has revised its foreign exchange forecasts, projecting a stronger US dollar against the euro and yen. Specifically, the bank anticipates the USD/JPY pair to rise to ¥155 within three months, maintain that level over the next three months, and decline to ¥150 within a year.

Suzuki’s comment caused a stir in the currency market, with USD/JPY experiencing a slight decline. The remark, which has been widely reported by news outlets, highlights the potential impact of high-profile statements on financial markets.

At a recent meeting in Washington, Japan’s finance minister, Suzuki, expressed his strong concern over the weak yen and its impact on rising import costs.

Suzuki has reiterated his stance on currency intervention, emphasizing that international cooperation is in place and intervention could occur to address excessive market movements. However, he notes that the current situation may not warrant intervention, as it could benefit buyers of the USD/JPY currency pair.