- The dollar has hit a new 24-year high against the yen.
- USD/JPY has pushed beyond the 145.00 intervention level.
- Japan has warned against yen declines, stating it is ready for another intervention.
Today’s USD/JPY price analysis is bullish, brought about by dollar strength. Japanese authorities continued to caution against investors selling off the yen on Wednesday as the dollar hit a new 24-year high versus the yen, fueling rumors of a second wave of intervention.
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The US dollar increased to 146.35 yen, the highest level since August 1998 during the Asian financial crisis. It surpassed levels that prompted Japanese officials to intervene last month to stop the yen’s unsustainable depreciation.
“We are closely watching foreign exchange moves with a high sense of urgency and ready to take appropriate steps on excess moves,” Chief Cabinet Secretary Hirokazu Matsuno told reporters.
The statement was made after Jiji Press quoted Finance Minister Shunichi Suzuki as saying that there had been no change in the country’s stance at all and that, if needed, it would take the necessary moves in the foreign exchange market.
Currency intervention might not be imminent because neither Matsuno nor Suzuki used strong terms to describe yen movements on Wednesday, such as “excessive,” “one-sided,” or “speculative.”
For the first time in 24 years, the Japanese government intervened in the market last month, paying 2.8 trillion yen ($19.2 billion) to stop the yen’s swift decline, deemed a threat to the economy. A second intervention might push the pair back below 145.00.
USD/JPY key events today
Investors will pay attention to the US producer price index, a leading indicator of consumer inflation. They will also receive the FOMC meeting minutes showing more details on the last rate decision meeting.
USD/JPY technical price analysis: New highs challenging the 145.00 intervention level
Looking at the 4-hour chart, we see the price trading above the 30-SMA and the RSI above 50, showing a strong bullish trend. The price has broken above the 145.00 key resistance level that has stopped bulls several times. It has also broken above the 146.00 psychological level and looks set to continue making higher highs.
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However, if bears return to push the price back below 145.00, the current bullish move will be considered a false breakout, and a new downtrend will begin.
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Saqib Iqbal
