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Bessent verbal intervention sent USDJPY lower but did not make a new low.
“I am the house now, so when we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the Bank of Japan is going to do, what Japanese policymakers are going to do,” Bessent said. “And you can bet against me if you want.”
How Interest Rates Affect Financial Markets and Traders
Forex Market Snapshot
Markets continue to shrug off firming oil prices (but for how long?) where Brent touching $100 per barrel is grabbing headlines.
It may be a matter of a wait-and-see ahead of key events, an expected ECB rate hike Thursday and US inflation reports over the next two days.
In the meantime the dollar is trading a touch softer but so far with limited follow through after EURUSD paused around 1.1650 and USDJPY found support again just below 153.
USDJPY 1 HOUR: Bounce off the low
As noted yesterday, the break below 155 had left a void until 152.00-07 as the next target and USDJPY made a run at it before pausing at 152.88.
The subsequent bounce has created some up short-term momentum off higher lows (2 red AT lines) that would need to get through 154.38-63-80 to shift the focus back io 155.
Otherwise it is consolidation with upside contained while below the layer of resistance and key sell stops exhausted until/unless a new low is made.
Forex Market Snapshot
The dollar is tracing mixed, up vs all but the CAD and JPY, the latter up small after USDJPY bounced after extending its low to 152.88.
The mood otherwise is risk off as firm oil prices and-higher US bond yields (curve steepening) weigh on stocks amid rising geopolitical concerns.
No key US data is due today.
USDJPY WEEKLY: Confirms a downtrend
Break of 155 confirms a weekly chart downtrend that shows a risk for 152.00-07 while it trades below 155.
In the absence of nearby support, expect 153.50 to be pivotal (i.e. above it range is to 155, below it opens the door to 152) and 154 ahead of it.
To state the obvious, 155+ would be needed to cool the risk.
Forex Market Snapshot
The dollar is starting the week on a soft note led by a USDJPY plunge through 155. Offsets are seeing lags elsewhere (e.g. EURJPY) as unwinding of short JPY crosses are again helping to drive the currency higher. There has been little or no chatter of another BoJ ambush, which in any case has turned technicals in its favor.
US is closed today in a week highlighted by the ECB decision and US inflation reports.
USDJPY found some 📈buyers near the crucial 155.00 level early on Friday, a zone previously defended by FX intervention, following a sharp two-day drop from 160.00.
The focus now shifts to the US nonfarm payrolls report due at 12:30 GMT. While traders remain laser-focused on inflation after Fed Governor Waller pushed September rate-hike odds down to 50%, a solid jobs print could still prompt policymakers to hike rates
Meanwhile, Japan’s top currency diplomat, Atsushi Mimura, reiterated that Tokyo remains on high alert to intervene against excessive yen weakness
USDJPY 🚨saw the strongest movements in yesterday’s session, with the bearish pressure🚨 lingering today. USDJPY is hovering in the🚨 157.20 area more than two big figures below Tuesday’s close.
Comments from BoJ member Takata about the BoJ not being confined to 25bps increments, dovish rhetoric from New York Fed President Williams and stronger Japanese data have most likely played a key role in the USDJPY decline, although a mini-intervention or a rate check from the Fed cannot be excluded
Forex Market Snapshot
The dollar is trading weaker led by USDJPY which has extended yesterday’s slide after breaking a 4- day pattern around 160.
Others are following with a lag,m suggesting frirmer JPY crosses where the market is having more trpuible absorbing the USD selling side *i.e. USDJPT selling) of the trade.
US yields have slipped a touch,crude oil consolidating,.
US Weekly Jobless Claims and ISM Services PMI due later.
USDJPY 4 HOUR: Path of least resistance
Trend: Retracement risks stalling Momentum: Up stalled
Extending its trade around 160 to 4 days in a row. Pause just above 159.40 so far checking the downside and keeping focus on 160. Below 159.40 would shift focus from 160 to layers of support from 158.99-159.24 below it6. Meanwhile, market follows the path of least resistance buying JPY on its crosses.
Forex Market Snapshot: New month, new ball game
As suggested yesterday, USD selling appeared to be driven by month end related flows and this has proved to be the case with the currency firming today although for the most part with limited follow through (AUD and NZD) underperforming as mood turns tio risk off).
The focus, meanwhile, is not on forex but on rising oil prices that have helped trigger what is being described as a rout (i.e. higher yields) in the global bond market (e.g. JGB 10 year hit 3%, a 30 year high).
In forex, the USDJPY test of 160+ again (3rd day) between 160.29 and 160.02) has raised an intervention alert, which is being encouraged by Treasury Secretary Bessent comments calling for a firmer JPY.
Looking ahead, US ISM PMI highlights the economic calendar with added attention on the prices paid component.
USDJPY DAILY: Where is resistance?
Bessent says disorderly yen moves can destabilize global markets (Reuters)While USDJPY 160 is the obvious focus, the BoJ intervention ambush, supported by Treasury Secretary Bessent, has left little in the way of resistance other than 160.64 = =61.8% OF 163.98 => 155.23
in this case, the threat of intervention is likely more of a deterrent than the actual event, which should it occur would find likely buyers at lower levels (unless 155.23 is broken).
In the meantime, 160 is pivotal (Friday high 160.20) with support starting at the former 159.78 high
Forex Market Snapshot
The dollar seems set to end the week on the defensive as it trades lower ahead of the US open. US bond yields have steadied and stocks are up but talk the U.S. fiscal position, with the total deficit surpassing $40 trillion grabbing headlines and rising, is acting as a weight on the dollar.
- AUD and NZD outperforming,
- USDJPY is weaker after completing a 61.8% retracement (159.11) but is still above 158
- GBPUSD has extended its high, marginally so far, through a 1.3658 target
- EURUSD retested its 1.1710 high, holding so far
- USDCAD extended its low but so far holding above 1.3730 support
USDJPY 4 HOUR: Confounding
Bounce off (just above) 158.00 and a higher low confounding the general bearish USD trend.
Charts show little until 159.77 other than 159.105 = 61.8% so look for 159.00 to be pivotal.
No apparent catalyst other than the uptick in US yields and weak JPY crosses (vs. Gold and Crypto as well).
