The Japanese Yen is losing value compared to the US Dollar, but traders are hesitant to push the exchange rate much higher. This is because the Dollar is approaching 152 Yen, a level that might trigger intervention from the Bank of Japan (BoJ) to support the Yen. The BoJ has previously intervened when the Yen weakened significantly.
Even though the BoJ is considering tightening its monetary policy, the Yen still offers low returns compared to the Dollar. This makes the Yen less attractive to investors, putting downward pressure on its value.
The BoJ may struggle to completely stop the Yen from weakening, but it might try to slow down the process. The exchange rate hasn’t moved much in the past ten days, staying just below 152 Yen. The next big factor affecting the exchange rate will likely be US jobs data released tonight. If the data is better than expected, the Dollar could strengthen further, potentially forcing the BoJ to take action.
USD/JPY H4 Chart Compiled Using TradingView
The distinct tightening of this market beneath the 152 threshold indicates that the underlying fundamentals are currently dominant and are expected to continue in this manner unless the Bank of Japan takes action or the US Dollar naturally retreats from that particular region.
Near-term support within a channel is anticipated around the psychological level of 151, with additional support likely around the 150.67 mark from late February. Critical technical supports are situated further below the current market level, including Fibonacci retracement support at 149.247 and an uptrend channel expected to provide support at 148.663.
Source: https://www.dailyfx.com/