Japanese Yen Ticks Lower Again as Market Looks Past Intervention Jitters to Fed

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It seems highly likely that Tokyo intervened to boost the Yen this week. But, if it did, it didn’t get much for its money.

If, as looks increasingly likely, Japan’s Ministry of Finance intervened in the foreign exchange market on Monday to counter Yen weakness, it hasn’t bought a lot of respite. Although Tokyo has not so far confirmed or denied any action, wire reports based on money market data suggest that as much as $35 billion could have been spent to prop the Yen up.

For now, of course, all this matters less than what the Federal Reserve will do later on Wednesday’s global session. The US central bank is not expected to do anything to borrowing costs this time around, but the extent to which it confirms market expectations that rates could still fall around the end of the third quarter will be key.

Unsurprisingly, however, the market is starting to look overbought and perhaps a little short of momentum now, and it would not be a surprise to see the rate retreat into that band. It now offers support at 157.26. Naturally traders will now be on watch for any signs that the Tokyo authorities are stepping in whenever the market gets up toward 160.00. However, while suspicions of that might stop sudden upside spikes, it seems unlikely to stop this bullish market getting there in due course anyway.

 

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Japanese Yen Lower Again, USDJPY Market Weighs Intervention ChancesWith the Yen at multi-decade lows, and commentary out of Tokyo suggesting enough is nearly enough, this is not a market to look away from now.
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