USD/JPY keeps erasing intervention losses as macro backdrop remains skewed to the upside

Japanese yen slowly erases intervention-driven gains as macro backdrop remains negative

The desk views the Japanese yen as facing continued bearish pressure, primarily due to persistent negative macroeconomic fundamentals and ineffective intervention measures. Per the full note from Giuseppe Dellamotta, the Bank of Japan's (BoJ) recent decision to maintain interest rates at 0.75% reflects a cautious stance amid rising inflation forecasts and downgraded growth expectations linked to geopolitical tensions. With the Fed's shift away from an easing bias and the potential for increased economic activity post-conflict, the yen's outlook remains bleak. Upcoming US economic data, particularly the NFP report, could further influence USD/JPY dynamics.

USD/JPY flirts with a key upside breakout as yen's intervention-led gains continue to fade

The desk sees the USD/JPY poised for a potential upside breakout as the yen's recent gains, driven by intervention, appear to be waning. Per the full note [source], the US dollar has regained traction amid higher-than-expected inflation data and geopolitical tensions, while the Bank of Japan's dovish stance continues to weigh on the yen. With the USD/JPY testing the critical 158.00 resistance level, a breakout could signal a move towards 162.00, contingent on the Fed's evolving policy stance and upcoming economic data. The market remains cautious, awaiting the US Retail Sales report and Jobless Claims figures, which could provide further direction.

USD/JPY continues to edge higher as yen bias stays bearish amid negative macro backdrop

USD/JPY rebounds into a key resistance as interventions can't stop yen's slide

The desk views the USD/JPY pair as poised for a potential reversal as it approaches the key resistance level of 158.00, with bearish sentiment on the yen persisting despite recent interventions. Per the full note [source], geopolitical tensions and a shift in the Fed's monetary policy stance are contributing to the dollar's strength, while the Bank of Japan's (BoJ) cautious approach to rate hikes continues to weigh on the yen. Upcoming US economic data, particularly the CPI report, will be critical in shaping market expectations. The consensus target for USD/JPY remains at 1.075, with a range of 1.04 to 1.12, indicating a divergence in views among major firms.