USD/JPY now trades at 80.70, after jumping across the historic 79.75 back on its way up. The members of the G-7 agreed on an intervention to weaken the yen and to aid the Japanese economy after the catastrophic earthquake. Update on this dramatic pair.
Japanese finance minister Yoda said that the G-7 agreed to intervene. Such interventions usually come as a surprise and try to catch the market by unprepared. This time, the intervention is out in the open.
Dollar/Yen moves on the actual buying of the pair by Japan and by other market participants that want to ride the wave. It’s still unclear if other countries are doing the same of just backing Japan.
This follows yesterday’s avalanche of Dollar/Yen. The worries about a major nuclear catastrophe which is out of control sent the pair lower on yen repatriation speculation. When the pair reached the previous historic all-time low of 79.75, stop orders were triggered and USD/JPY collapsed all the way to 76.25 before bouncing back. After the shock, it traded around 79.
When reporting about this huge USD/JPY collapse, the option of a massive international intervention is mentioned. Now we have it.
80.40, which was support from November, returns to its role. It’s still followed by the previous old low of 79.75. Looking up, resistance is found at 80.90, followed by 81.80. For more lines,technical analysis and events, see the USD/JPY forecast.
And here’s more about all the forces moving the yen.
Note that this event follows the decision by the UN to approve air strikes on Libya. This decision means complicating the situation in this important oil producing country. The prices of oil is on the rise, and weakens the dollar. So, the Japanese authorities have an uphill struggle to push USD/JPY higher.Get the 5 most predictable currency pairs