Massive Volatility In Yen
JPY Explodes
USDJPY is on watch today amidst huge volatility in the pair around the BOJ meeting overnight. JPY rallied 600 pips against the Dollar despite the BOJ keeping rates on hold with many clearly suspecting intervention from Japanese authorities. Officials there have been warning of intervention risks for months now amidst the record decline in JPY. With USDJPY continuing to push higher over the last month, speculation was raging around when action would be taken. The timing of the intervention around the BOJ meeting suggests a real fear that USDJPY would have otherwise soared in response to the BOJ leaving rates on hold. The question now is whether this action can achieve a more lasting reaction in markets than the previous intervention episodes in April and May which proved short lived.
Hawkish Hold From BOJ
On the BOJ front, the bank was seen warning that inflation risks remain for now with the bank signalling that core inflation could move clearly above target through H2 2026. As such, the view now is that the bank is likely to hike again over the remainder of the year. Indeed, one policy member dissented and voted for a hike at this meeting. Looking ahead, there is room for USDJPY to push lower near-term given the weakness we’re seeing in USD. If that weakness can remain, this should help the BOJ’s cause for now.
Technical Views
USDJPY
The sell off in USDJPY has seen the market breaking down to test the bull channel lows and the 157.85 level. For now, this zone is holding as support and while it does so, focus is on a continuation higher with the bull trend stull intact. If we break below that level, however, focus turns to deeper support at the 154.665 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.