No Intervention In Usdjpy For Now

No Intervention In Usdjpy For Now by Andrew Blumer last updated on September 18, 2024

Fx Diplomat Says No Intervention Unless Usd/Jpy Crosses 155

According to a form currency diplomat, 'Hiroshi Watanabe,' the central bank will not resort to FX intervention unless the USD/JPY crosses the 155.00 handle.

For now, the USD/JPY is trading at 151.61 with a mostly bullish bias over the medium and long term. This means there's still a lot of trading space for the USD/JPY until the fears of intervention become a reality.

152 - 155 Range For Intervention

Despite this, the markets are still acting with caution in case the Japanese authorities intervene to support the JPY. In 2022, a move above the 152.00 handle sent the BoJ into action.

Watanabe is a top currency expert who was responsible for Japan's currency policy during the 2004-2007 period. According to him, the chances of any intervention by the BoJ are still slim.

He also added that the decline in the JPY is still contained in a broad range, which is different from what we saw in 2022.

So, while Watanabe tasks about 155, the markets are looking at the 152.00 handles as the possible impetus for intervention. If we combine both of these views, it seems that the danger area where FX intervention can happen is 152.00 - 155.00.

If we look at the 155.00 level, it is important from a psychological point of view. Additionally, the break of the 155.00 will also draw the media/press attention. That's why it makes sense that the point of no return for the BoJ is 155.00.

In the short-term, the USD/JPU will likely trade in the 145.00 - 155.00 range. The reason for this is due to the gap between the interest rates of the USA and Japan.

For now, the Yen is under pressure in the long term despite the fact that BoJ has exited from the policy of negative interest rates.

If we look at the exchange rate, the USD/JPY is sitting near 151.70, which is still a multi-decade high and not at a normal level at all.