USD/JPY keeps erasing intervention losses as macro backdrop remains skewed to the upside
USD/JPY — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 165.00 |
UOB | Bearish | 163.00 |
Citi | Bearish | 163.00 |
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FUNDAMENTAL OVERVIEW USD: The US dollar extended the gains across the board as markets are starting to grow impatient amid the prolonged US-Iran stalemate and Strait of Hormuz closure. Treasury yields came into the spotlight on Friday as they broke March highs on increasing infla
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4 itemsJapanese 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.