empty
06.05.2024 01:15 PM
Japan to intervene market once again?

This image is no longer relevant

Last week, the USD/JPY pair experienced its strongest drop since November 2022, falling by more than 4%. Many traders suppose that the Japanese government, which has twice entered the market to support its currency, was involved in the sharp decline of the dollar against the yen. They do not rule out that the authorities will soon repeat the scenario of 2022 when they conducted three consecutive currency interventions.

Why did the yen surge?

Last week, the Japanese currency showed three jumps against its American counterpart, two of which were probably caused by Tokyo's interventions.

The first sharp strengthening of the yen occurred on Monday, April 29, after the JPY tumbled against the dollar to a new 34-year low of 160.245 due to a more dovish than anticipated Bank of Japan meeting rhetoric.

At its April meeting, the BOJ kept rates in their current range, which was set in March, and made it clear that it was not going to raise the rate anytime soon as it was not confident in inflation stability.

For the second time, the yen rose rapidly against the dollar on Wednesday, May 1, a couple of hours after the conclusion of the Federal Reserve's meeting. At that meeting, the regulator also kept interest rates unchanged and reiterated its intention to keep them high until inflation starts to fall steadily.

The prospect that the huge gap between US and Japanese rates will persist for a long time allowed the dollar to keep from falling against the yen. However, the greenback dropped after Fed Chair Jerome Powell said that a rate hike was unlikely to be the central bank's next move.

The striking resilience of the USD/JPY pair is thought to have forced Tokyo to conduct a second intervention to support the yen. Curiously, the Japanese government refused to comment on the fact that it was involved in the sharp rise in the JPY on both occasions.

Nevertheless, Bloomberg analysts said the other day that Japanese authorities spent more than 9 trillion yen last week to support their weakening currency.

The third wave of yen strengthening occurred on Friday, May 3. This was a natural rise in the Japanese currency caused by fundamental factors, namely, weak statistical data on the US labor market.

The Nonfarm Payrolls report published at the end of the week unveiled that last month American employers created 175 thousand jobs, which is the smallest increase in six months. The reading was below the expectations of a rise of 243 thousand.

At the same time, payrolls advanced by 3.9% at an annualized rate, which is also below the 4.0% forecast and down from March's 4.1% growth. Meanwhile, the unemployment rate climbed to 3.9% from 3.8% in April.

Signs of a cooling US labor market have intensified traders' views of an earlier US rate cut. Now, investors assume that the regulator will start cutting the benchmark rate in September instead of November.

Also, after the employment report, traders increased the probability that the Fed would impose two rounds of monetary policy easing this year. They now expect the regulator to lower rates by about 47 bps by the end of the year, compared to the projected 42 bps before the nonfarm payrolls were published.

Strengthening dovish sentiment among traders around the Fed's future policy has put heavy pressure on the dollar. On Friday, the US dollar index tested a 3-month low of 104.52, while against the yen it weakened by more than 1% to the lowest level of 151.86 last seen on April 10.

The yen may need another bailout

On Monday, the USD/JPY pair stopped its multi-day decline, starting a rapid rise. Thus, at the time of the publication, the major jumped by almost 0.5% to the level of 153.98 from Friday's close.

This image is no longer relevant

The comments of US Treasury Secretary Janet Yellen on the alleged Japanese interventions last week were the main driver for the asset.

The official noted that the Japanese currency had strengthened sharply. However, she did not comment on whether Japan had intervened to support the yen.

This image is no longer relevant

"I'm not going to comment on whether they did or didn't intervene," Yellen told reporters on Saturday, stressing that interventions should be aimed only at reducing market volatility, not at manipulating exchange rates.

The fact that the US government has not confirmed the intervention has encouraged dollar bulls. However, this could not be a very good idea given today's low liquidity.

On Monday, markets in Japan are closed due to Children's Day celebrations, which is likely to result in lower trading volumes. Since Japanese authorities chose calm periods last week to intervene, traders should now be on high alert throughout the day.

Valentin Marinov, an analyst at Credit Agricole, said that Tokyo might lower USD/JPY once again. He supposes that they may enter the market again in the very near future to maximize the effect of their previous interventions, taking advantage of the reduced liquidity during the holidays.

The same viewpoint is supported by his colleagues at Goldman Sachs. They also see a high risk of Tokyo's repeated intervention this week, as the macroeconomic situation as a whole remains quite negative for the yen.

"But, buying time is still valuable, as it reduces the potential for economic disruptions from the exchange rate adjustment and could stabilize the currency until the economic backdrop becomes more supportive for JPY," experts said.

Meanwhile, the weekly report of the Commodity Futures Trading Commission showed that last week, traders abandoned record bets on the yen's drop.

Leveraged funds and asset managers now have about 168,388 contracts tied to bets on the yen falling in the coming weeks.

"Traders edged back from record bets on yen weakness this past week, in a period that included a likely bout of intervention by the Japanese," Bloomberg analysts said.

Speculative traders have been opening short positions on the Japanese currency since early 2023. That means that some down bets may be more sustainable than those made in recent weeks, when the yen's fall against the dollar accelerated.

For this reason, many analysts, including Rabobank's Jane Foley, are confident that Japan's Finance Ministry will not limit itself to just two interventions and will continue to stabilize its currency as needed.

She thinks that Tokyo will have to lower the dollar/yen exchange rate more than once to really undermine the resolve of many speculators.

Ringkasan
Segera
Analitic
Аlena Ivannitskaya
Mulakan perdagangan
Jana pendapatan melalui perubahan kadar mata wang kripto dengan InstaForex.
Muat turun MetaTrader 4 dan buka dagangan pertama anda.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    SERTAI PERADUAN

Artikel yang dicadangkan

Ringkasan Berita Pasaran AS untuk 12 Ogos

Pada 11 Ogos, indeks saham AS menutup sesi dagangan dengan sedikit penurunan. Walau bagaimanapun, sentimen pelabur bertambah positif susulan kenyataan Donald Trump mengenai penyambungan semula bekalan cip ke China serta

Ekaterina Kiseleva 13:17 2025-08-12 UTC+2

Pasaran Dalam Mod Tunggu dan Lihat: Data Inflasi Serta Mesyuarat Pemimpin Menjadi Fokus Utama

Saham Wall Street menutup dagangan dalam zon merah. Pedagang dolar dan bon sedang menantikan penerbitan data harga pengguna AS. Harga minyak didagangkan mendatar menjelang rundingan antara Trump dan Putin. Emas

11:10 2025-08-12 UTC+2

Pasaran Menunggu Keputusan: Data Inflasi dan Pertemuan Pemimpin Jadi Penentu

Saham di Wall Street ditutup lebih rendah di tengah sesi dagangan yang tidak menentu. Dolar dan bon sedang menunggu penerbitan data mengenai indeks harga pengguna AS Harga minyak didagangkan pada

Thomas Frank 11:07 2025-08-12 UTC+2

Bitcoin Terus Tidak Menentu: Kejatuhan Selepas Kemenangan, Satu Lagi Usaha Mencapai Kenaikan. Volatiliti Kekal Tinggi, S&P 500 Berdepan Unjuran Menaik

Mata wang kripto utama itu memulakan hari dengan percubaan untuk pulih, berusaha mengimbangi kejatuhan terkininya. Bitcoin kini kembali menyertai perlumbaan kripto, bersaing rapat dengan Ethereum yang turut berusaha mengekalkan kedudukan

Larisa Kolesnikova 10:48 2025-08-12 UTC+2

Lonjakan Bitcoin, 8 Altcoin yang Dinilai Rendah, dan Berita Positif daripada Pasaran Kripto AS

Perubahan pesat terus melanda pasaran mata wang kripto: Bitcoin sekali lagi menghampiri paras tertinggi sepanjang masa, altcoin utama mencatatkan kenaikan meyakinkan, manakala pelabur giat mencari peluang baharu untuk meraih keuntungan

Natalia Andreeva 14:31 2025-08-11 UTC+2

Ringkasan Berita Pasaran AS untuk 11 Ogos

Indeks S&P 500 dan Nasdaq masing-masing naik sebanyak 0.78% dan 0.97%. Para pelabur memberi reaksi positif terhadap prospek penyelesaian aman bagi konflik di Ukraine dan penurunan harga minyak, yang boleh

Ekaterina Kiseleva 13:01 2025-08-11 UTC+2

PASARAN global melonjak: pelabur bersedia menghadapi rundingan penting AS-Rusia

Pasaran saham Eropah meningkat: didorong oleh harapan terhadap perjanjian damai dan jangkaan data inflasi AS. Asia mencatat peningkatan: disokong oleh laporan pendapatan yang kukuh dan sektor teknologi. Harga minyak menurun

10:56 2025-08-11 UTC+2

Pasaran global berada dalam aliran menaik: pelabur menahan nafas menjelang rundingan penting AS–Rusia

Eropah kekal dalam kedudukan positif apabila pasaran saham meningkat, didorong oleh harapan terhadap perjanjian damai dan jangkaan penurunan inflasi di Amerika Syarikat. Pasaran Asia turut mencatatkan pertumbuhan, disokong oleh laporan

Thomas Frank 10:56 2025-08-11 UTC+2

Syarikat Farmaseutikal Gergasi Tertekan: Saham Eli Lilly Menjunam Akibat Laporan Ujian Klinikal

Saham Eli Lilly jatuh setelah data peringkat akhir ubat penurunan berat badan secara oral Tuntutan pengangguran mingguan mencapai paras tertinggi dalam sebulan Indeks Topix Jepun naik melebihi 3,000 buat pertama

Thomas Frank 07:55 2025-08-08 UTC+2

Peneraju teknologi bersatu: Apple komited $100 bilion, S&P 500 mencatat rekod

Apple dijangka mengumumkan pelaburan sebanyak $100 bilion, menurut jurucakap Rumah Putih. Laporan pendapatan S&P 500 terus melebihi jangkaan. Saham teknologi memimpin kenaikan di tengah-tengah keputusan korporat yang kukuh di seluruh

10:25 2025-08-07 UTC+2
Tidak boleh bertanya sekarang?
Tanya soalan anda di Ruangan bersembang.
Panggilan semula Widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.