USD/JPY: Another intervention looming?
The stronger NFP print gave rise to renewed dollar buying and this sent the USD/JPY to a new weekly high.
The USD/JPY has refused to down despite the Japanese government's buying of yen with its huge dollar reserves.
The country's foreign reserves fell by a record $54 billion in September.
This was in response to the sharp depreciation of the yen, which prompted the government to go on a dollar-selling intervention to arrest a steep decline in the currency.
At the end of September, Japan's reserves stood at $1.238 trillion. This was the lowest since March 2017.
Today’s stronger US jobs report means talks about the Fed potentially pivoting have all but ended. The dollar is thus likely to remain supported on the dips, with investors also likely to be discouraged from the stock and gold markets, with the latter particularly looking less attractive because of the fresh breakout in bond yields.
With the Bank of Japan continuing with its yield curve control policy, you can't help but feel that the USD/JPY is either going to explode higher soon or there will be another big intervention coming from Japanese authorities, or both.
It is thus very important to ensure you take extra care when trading the yen pairs.
By Fawad Razaqzada
The USD/JPY has refused to down despite the Japanese government's buying of yen with its huge dollar reserves.
The country's foreign reserves fell by a record $54 billion in September.
This was in response to the sharp depreciation of the yen, which prompted the government to go on a dollar-selling intervention to arrest a steep decline in the currency.
At the end of September, Japan's reserves stood at $1.238 trillion. This was the lowest since March 2017.
Today’s stronger US jobs report means talks about the Fed potentially pivoting have all but ended. The dollar is thus likely to remain supported on the dips, with investors also likely to be discouraged from the stock and gold markets, with the latter particularly looking less attractive because of the fresh breakout in bond yields.
With the Bank of Japan continuing with its yield curve control policy, you can't help but feel that the USD/JPY is either going to explode higher soon or there will be another big intervention coming from Japanese authorities, or both.
It is thus very important to ensure you take extra care when trading the yen pairs.
By Fawad Razaqzada
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