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USD/JPY slides after BoJ rate checkThe Japanese yen has posted sharp gains today. USD/JPY is trading at 143.09, down 1.00% on the day. The yen has taken investors on a roller-coaster ride this week. On Tuesday, the dollar shined, posting broad gains against the majors and climbing 1.19% against the yen. The catalyst for the upswing was the US inflation report, which was higher than expected. The yen has recovered most of these losses today, after reports that the Bank of Japan had conducted a rate check, which could signal currency intervention in order to prop up the ailing yen. The BoJ has rigidly maintained its ultra-loose monetary policy in order to stimulate Japan's fragile economy. As part of this policy, the BoJ has kept a firm hand on its yield curve control, and the price for this stance has been a freefall in the yen, which is done an astounding 30% against the dollar this year. Japanese policy makers have fired verbal warnings about the yen's depreciation causing deep concern, but the markets have learned to ignore the rhetoric, which hasn't been backed up by any action. The yen hit 144.99 last week, a new 24-year low, and there has been speculation that 145 is a line in the sand for Japan's Ministry of Finance, which would be responsible for a currency intervention by purchasing a massive amount of yen with US dollars on the currency markets. Japanese officials haven't ruled out intervention, but there is a legal hurdle as Japan cannot intervene in the currency markets without permission from the G-20. The last time Japan intervened to prop up the yen was in 2011, in the middle of a financial crisis in Asia. Still, investors will be paying close attention to the BOJ's meeting on September 22, which comes just one day after the Fed's next meeting. Any hints of intervention could send the yen sharply higher. If, however, Japan decides once again to stay on the sidelines, the yen has more room to fall. The Fed is likely to raise rates by 75bp at the upcoming meeting, but there is a reasonable possibility of a massive 100bp hike as well. With the yen at the mercy of the US/Japan rate differential, I expect the yen to continue to lose ground, barring some dramatic action from Tokyo. 1.4363 is the next line of resistance, followed by 144.81 USD/JPY has support at 142.56, followed by 141.88
by OANDA
USDJPY approaching BIG 148 Intervenion level. Wil BOJ act?The bulls are getting nervous on USDJPY as BoJ once again repeats potential intervention on the FX markets because of weak JPY which is not good for imports. Technically, we see pair trapped in a wave four consolidation which can be a flat or a triangle as first leg A and then B unfolded in three legs. As such, we still think that the current price move in 141-145 range is a correction that belongs to an ongoing uptrend. We see a nice important level around 148, especially if we consider levels back in 1998. That said, we believe that USDJPY is in some very late stages of a recent recovery, but short-term structure not showing a top yet!
by ew-forecast
2
💴Welcome to the new yen ; (USDJPY analysis) Today, all focus was on the euro, which is nearing a 19-year low, but the big story of the market year is the Japanese yen. We are witnessing a shift from a more than 20-year trend in the forex market of the Japanese yen as the safe-haven currency. The USDJPY has risen for five consecutive days, but focusing on the last two days, global stocks have been beaten but the pair rose nonetheless. This was unthinkable a few years ago, but now it is commonplace. The currency pair has beaten USDJPY as the global safe haven of choice. A large part of this failure is the divergence in monetary policy as the Bank of Japan sticks to yield curve controls, but this is nothing new and the dollar has always been positive in carry trades against the yen. The main issue is that this has become very persistent, and if this trend continues to spread, it'll increase the risk of overvaluation of the dollar around the world. ✌️ Good luck with your trading and investing and remember: Trade smart…OR JUST DON’T TRADE! -------------------------------------------------------------------------------------------------------------------- 👉This analysis is my personal opinion ,not a financial advice ,so do your own research. 💚 if you're fan of my analyses please follow me , give a big thumbs 👍 OR drop a comment 🗯
by PRO_SMART_Trader
12
Can USD/JPY finally make a break for 140?The question on most trader's minds is whether USD/JPY will finally test 140. And another question is whether the BOJ (Bank of Japan) could intervene to weaken the yen and send USD/JPY lower. But it should be remembered that it is not an exact level in which the yen trades as to whether the BOJ intervenes, but how quickly it gets there. The BOJ have made it clear that they view a weaker currency as beneficial for the economy overall, so as long as volatility remains in check the potential for 140 USD/JPY (or higher) remains a distinct possibility. But given that Friday's NFP report is the main focus for the week, perhaps prices will remain below 139.39 heading into it and retrace against the trend. As for the charts, its rally has stalled just below the YTD high (139.39) and a Doji formed on the daily chart, which shows a slight hesitancy to break immediately higher. The 20-bar eMA has provided support on the 4-hour chart and a bullish engulfing candle has formed, leaving the potential for another crack at the YTD high. But such key levels rarely break upon their first re-test, hence the potential for a pullback. But we'd look for bullish setups at or around the 138 support level or lower trendline, in anticipation of its next leg higher towards 140 - near the weekly R3 pivot point.
Long
by CityIndex
USD/JPY eyes Japanese CPIIt hasn't been a good week for the Japanese yen, as USD/JPY has climbed 1.24%. The yen is almost unchanged today, trading at 135.16. Japan wraps up the week with a key inflation release on Friday. Core CPI is forecast to rise to 2.5%, up from 2.2% in June. Japan's inflation rate is much lower than what we're seeing elsewhere, such as double-digit inflation in the UK. Still, after decades of deflation, inflationary pressures are a whole new world for Japanese policymakers, and the Bank of Japan is having to keep an eye on inflation, which is slightly higher than the central bank's inflation target of 2%. Unlike the Fed and the Bank of England which have declared inflation as public enemy number one, the BoJ is focused on stimulating the weak economy with an accommodative policy. That has meant being vigilant to keep JGB at low rates, even if this has resulted in a widening of the US/Japan rate differential and the yen falling close to 140 in July. Until the BoJ is convinced that inflation is not transient, a tweak or two is all we can expect with regard to monetary policy. The Federal Reserve minutes on Wednesday were essentially a rehash of the Fed's hawkish message; namely, that inflation has not been beaten and rate tightening will continue. Meeting participants said that the pace of rate hikes could ease once it was clear that inflation was easing, adding that there had not been signs of that so far. This is a very different take than the markets, which were practically giddy after US inflation dropped unexpectedly in July. The Fed has pledged to keep raising rates, but the markets are marching to their own tune and appear to be expecting a U-turn in policy, which has sent the equity markets higher and the US dollar lower. 135.46 is under pressure in resistance. Next, there is resistance at 1.3744 There is support at 133.60 and 131.62
by OANDA
Yen steady as GDP within expectationsThe Japanese yen has started the week quietly. In the European session, USD/JPY is trading at 133.29, down 0.14%. This follows a positive week for the yen, in which USD/JPY declined by 1.15%. Japan's GDP for the second quarter rose 0.5%. The reading was a notch below the forecast of 0.6%, and the yen showed little interest. Domestic consumption, which makes up some 60% of Japan's GDP, rose by 1.1%, reflective of pent-up demand after Covid restrictions were lifted in March. As well, exports increased by 0.9%, in Q2, certainly good news as the global economic outlook remains gloomy. On an annualized basis, GDP rose 2.2%, shy of the estimate of 2.6%. Still, the reading indicated that Japan's economy has returned to its pre-Covid size, although the recovery has lagged behind other major industrial countries. What does the GDP reading mean for the Bank of Japan? In all likelihood, not very much. Inflation has risen slightly above the BoJ's 2% target, but is low compared to other major economies, which are grappling with red-hot inflation and have embarked on an aggressive rate-tightening cycle. Prices have been rising more quickly than wages, meaning that real wage growth has been on the decline. As well, inflation has largely been driven by high commodity prices, which may not be a long-term trend. Until there are signs that inflationary pressures are broadly based, the BoJ will do little more than tweak its policy. For the BoJ, the primary focus is not inflation, as is the case with the Fed and the BoE, but rather the need to support the economy. This means "business as usual" for the BoJ until it is convinced that inflation is sustainable. 133.60 is a weak resistance line, followed by 1.3504 There is support at 131.62 and 130.70
by OANDA
Yen tumbles to 139The Japanese yen has been pummeled today by the US dollar. USD/JPY is currently trading at 139.22, up 1.29% on the day. The US dollar is showing broad strength today, and for the yen that has meant a new 20-year low, as USD/JPY touched 139.39 earlier in the day. The symbolic 140.00 line is within striking distance, and it would certainly be memorable if the yen breaks 140 right after the euro broke below the parity line for the first time since 2000. There has been a parade of central banks announcing higher rates in the past day, notably the Bank of Canada, which surprised the markets with a massive 100bp increase, and the Bank of Korea, which raised rates by 50bp. This has put the Bank of Japan's loose policy further out of sync with the global trend of tightening, and this appears to be weighing on the yen. On Monday, the yen slid around 1%, triggering a response from Japan's Finance Minister Suzuki, who expressed his concern about the exchange rate at a meeting with US Treasury Secretary Yellen. We have seen this jawboning from Suzuki before, but the likelihood of the Ministry of Finance (MOF) intervening in the currency markets to prop up the ailing yen are remote. We have seen the yen cross the 120 and 130 lines without incident, and there is nothing magical about the 140 level either. I would note that there are mixed signals emanating from the MOF and the Bank of Japan, which lead me to believe that no intervention is being planned. Governor Kuroda reiterated on Monday that the central bank would take additional monetary easing steps as necessary in order to boost the fragile economy. Kuroda has said on occasion that a weak yen has its advantages, and it seems unlikely that a 140 yen will trigger any change in policy from the BoJ. There are no guarantees, of course, but I would submit that the MoF and BoJ have bigger worries than a weak Japanese yen.  USD/JPY has support at 135.82 and 135.06 There is resistance at the round number of 140.00, followed by 142.14
by OANDA
BOJ's Loose Policy Opens Path to YEN Depreciation.Target 146.000Fundamentally, there is no saving the YEN as the central bank of japan decided to stick to its policy whereas the opposite could be said for the safehaven high yielding USD. The difference in interest rates has pushed the USD higher against all major and developing currencies. With the inflation still yet to peak, we can expect the FED to keep raising the interest rates to tame the inflation. This week's CPI reading would be crucial for the FED to decide on what to do at its upcoming meeting. Technically, the supply zone/ resistance level has broken with weekly candle closing above 135.000. As for now, the next resistance comes in at around 146.000 region. The zone between 135.000 & 146.000 seems to be clear of any hurdles and should provide nice and smooth path for the YEN depreciation in the coming weeks. On the lower end, the stop loss could be placed below 126.000 swing low, moreover there are multiple rising trendline that could support the prices near term. The above image shows UDJPY weekly chart, where it is quite evident the ascending trendline that are supporting the prices. Have a look at the main chart to observe closely all the details on the technical part of the analysis. Cheers
Long
by FX618Analysis
BOJ reaffirms policy, yen at 136The Japanese yen is one of those currencies that keeps investors on its toes, and it has certainly lived up to its billing in recent weeks. USD/JPY has shot up 5.79% in the month of June and is back above the 136.00 line. BoJ Core CPI, the central bank's preferred inflation gauge, ticked upwards to 1.5% in May, up from 1.4% prior and matching the forecast. There is no mystery behind the yen's sharp depreciation of some 17% in 2022. The currency has been at the mercy of the US/Japan rate differential, which has continued to widen. The Federal Reserve is in the midst of an aggressive rate-tightening cycle, with the Fed delivering a massive 0.75% increase at its last meeting. The Bank of Japan continues to take an opposite approach, that of an ultra-accommodative policy. The BoJ has maintained this stance at a time when other central banks are tightening, in order to boost the fragile Japanese economy. While other major economies are struggling with surging inflation, Japan's inflation is around 2% - quite low but nonetheless on the rise after some 15 years of deflation. Governor Kuroda reiterated on Wednesday that the BoJ would maintain an accommodative policy, insisting that the increase was mostly a result of higher energy prices. Kuroda has said in the past that the present bout of inflation is temporary and that the BoJ would not change policy until inflation was anchored by higher domestic demand and an acceleration in wage growth. With neither of those criteria likely to occur anytime soon, we can expect the BoJ to continue to tenaciously defend its yield curve control and do little more than jawbone about the exchange rate. This does not bode well for the yen, which could continue its sharp slide and fall below the 140.00 line. USD/JPY faces resistance at 1.3654 and 1.3785 There is support at 1.3540 and 1.3409
by OANDA
JPYXJPYX is in a strong downtrend, you can see I have used the rvi indicator and noticed huge levels of divergence, this is a different reading on the indicator to what price is doing, so an example in this chart is the lower high in price and the higher high on the indicator, these are subtle signs that there is disturbance inbound, these divergences can often lead to good profits, so check it for yourself. The price action looks great currently with the MA8 trending under the MA89 signalling a downtrend, price has returned to the MA89 and given us divergences and sell signals on the indicator, so now our check list for entry is growing, we then take a look as oil price and notice the strong rallies in recent days, if oil continues to climb the JPY will likely lose more value, Personally I think the Japanese are waiting for US rate hikes to brind down the demand for the oil, in doing so this could see JPY make a strong bounce back. However in current conditions the JPY looks weak, so I believe to look for buys in yen crosses, and look for more long opportunities in oil if they present themselves.
PEPPERSTONE:JPYXShort
by ZenFlo
2
Yen in calm waters ahead of inflationJapan has seen inflation move higher, although nowhere near the levels in the US or the UK, which are not far from double-digits. Last week, core CPI for May came in at 2.1% YoY, unchanged from April. This was the second straight month that core CPI remained above the BoJ's target of 2%. This is a dramatic shift, given that Japan struggled with deflation for decades. The driver behind rising inflation is higher food and energy prices, as well as the plummeting yen. Notably, wages have not risen. The Bank of Japan has insisted that this cost-push inflation is temporary. The BoJ wants to see stronger domestic demand and an acceleration in wage growth before it will consider altering its ultra-loose monetary policy. This has taken a massive toll on the yen, which has plunged about 17% this year. The BoJ released its Summary of Opinions from the June meeting, with members showing support for the Bank's monetary policy. One member said that upward pressure on JGB yields could be expected. The Bank has tenaciously defended its yield curve control and intervened in order to cap 10-year yields at 0.25%. With the Federal Reserve in the midst of an aggressive rate-tightening cycle, the US-Japan rate differential will widen, putting more pressure on the yen. It's a busy week ahead for Japanese releases on the calendar, highlighted by further inflation releases. On Tuesday, we'll get a look at BOJ Core CPI, the central bank's preferred inflation gauge. This will be followed on Friday by Tokyo Core CPI for June, which could breach above 2.0%, after a 1.9% gain in May. USD/JPY tested resistance at 1.3540 earlier in the day. Above, there is resistance at 1.3654 USD/JPY has support at 1.3409 and 1.3295
by OANDA
Japanese yen eyes inflation reportThe Japanese yen is in positive territory today, extending its gains from yesterday. USD/JPY is trading at 135.46 in the European session, down 0.56% on the day. The yen has gained a bit of strength as USD/JPY is back below 136.00, after rising close to 136.71 earlier in the week, its highest level since September 1998. The yen received a reprieve from its recent slide due to a drop yesterday in US Treasury yields, rather than any newfound strength related to the yen. This is another indication that USD/JPY movement is at the mercy of the US/Japan rate differential, with the Bank of Japan holding firm on its yield cap for JGBs. The BoJ is not showing any signs of adjusting its ultra-accommodative policy, leaving the yen to bear the brunt of this inflexible stance. As a result, the yen has been pummelled by the US dollar, with the yen plunging some 17% in 2022. The central bank and Japan's Ministry of Finance have jawboned about the exchange rate, noting their concern. The verbal intervention has clearly not worked, raising the question as to whether Tokyo has a 'line in the sand', which if crossed, would trigger intervention in the currency markets to support the ailing yen. There had been speculation that a move above 125.00 or 130.00 could result in a response, but that failed to happen. Currently, there are voices stating that the 140 level is that line in the sand. BoJ Governor Kuroda has insisted that the Bank needs to support Japan's fragile economy with monetary easing, and has said that the exchange rate is not a policy target. Kuroda has even said that a weak yen has benefits for the economy, such as making exports more attractive. Given this stance, I question whether a 140.00 yen will trigger currency intervention. True, the yen is at 24-year highs, but let's not forget that USD/JPY has been above 200.00 and even 300.00 in the past, and the BoJ has indicated that the exchange rate is not a priority. There is resistance at 1.3657 and 1.3814 USD/JPY has support at 1.3404 and 1.3247
by OANDA
In Athena's CampWhat I am seeing is a lot of questions around the hanging and shallow nature of the pullback of 'iv' in this 'C' leg. We will also cover some of the Fed talk, which is getting somewhat over-cooked. In my opinion, the issue with the pullback in 'iv' is one of the classical issues with momentum and impulsive plays. We are here talking about the same leg from 100, 103, 105, 108, 114, 118, 120, and now 134. The value in FX is spotting divergences ahead of time, we outguessed the statically weak BOJ, while FED showed dynamic strength triggering an impulsive leg . In this impulse, the problem around when to add becomes important because the natural stop loss (i.e below the last 108 swing lows) reaches beyond the realms of any r:r. So has the train already left? It is essential for you to make up your own mind, based on your own experience, about the problem I have just indicated. Try, as Buyers aim to reach their natural target, e.g 150, to find some final hit-and-runs with the news flow. This has been an excellent live example so far. It will do you good to get a feel of how quickly impulsive legs can become in the middle and late stages. In addition, it has been an enriching experience of just how important it is to infiltrate your opponent before they realise the battle has even started. Hopefully some useful perspective, the fruits of the USDJPY maps stretching the last few years, will help you along this thorny road, but only painful experience can help you find your last minute entries here.
Long
by ridethepig
11
Yen falls back down after BoJ balksThe Japanese yen continues to post strong swings this week and is up sharply on Friday. USD/JPY is trading at 134.67 in Europe, up 1.86% on the day. It's been a busy week, with the markets still digesting some dramatic moves by central banks. The Fed and SNB delivered massive salvos in their fight against inflation, and the BoE continues to tighten, albeit at a more modest pace. The week wrapped up with the Bank of Japan policy decision earlier in the day. These meetings are usually on the dull side, with the central bank merely reaffirming its ultra-loose policy, with the occasional tweak. Today's meeting was closely watched, however, as the BOJ's yield curve stance has been under pressure and there was speculation that the BoJ might retreat and release the cap of 0.25% on 10-year JGBs. In the end, the BoJ did not blink or budge, maintaining its policy for yield curve control and QE. The BOJ reaffirmed it will continue its policy of rock-bottom rates, even though other major central banks are tightening policy, as we saw this week with the Fed, BOE and SNB. Governor Kuroda has insisted that monetary easing remain in place, given Japan's slow recovery from the Covid-19 pandemic. With inflation barely at 2%, the central bank's target, Kuroda can afford to continue his loose policy and tenaciously defend the BoJ's yield curve. The BoJ didn't adjust policy today but it was noteworthy that the policy statement added the exchange rate to its list of risks, something we haven't seen in previous statements. The yen hit a 24-year low at 135.60 earlier this week and could fall even further. The Bank is sending a message that it is monitoring the exchange rate, but I question whether this will deter the markets from continuing to test the yen - previous jawboning from the BoJ and Ministry of Finance didn't succeed in stemming the yen's slide, and we could well be on our way to a 140 yen if the US/Japan rate differential continues to widen. USD/JPY is testing resistance at 133.14. Above, there is resistance at 1.3585 There is support at 131.72
by OANDA
USDJPY - keep buying the dips, more expected the week of 06 JuneThis pair has made parabolic gains in 2022 and there seems to be nothing that can stop it. As the weekly chart shows, we did have a retracement recently, but note that the gains made by the bears in 3 weeks were recovered by the bulls in just a week. Price is now on the verge of breaking the 21 year high at 131.347. Checking out the fundamentals, I realized that Japan is keeping interest rates around 0-0.10% while the USA is above 1% and in the process of regular rate increases. Some analysts are projecting as much as a total of 3% increase in 2022. Something will probably change here but as long as the difference is so wide, we can expect the USDJPY to keep rising. There is also the phenomenon of ‘mean reversion’. Price does have the tendency to come back to its mean (see how far above the 20 EMA, price currently is). This huge gap has to close although it may take several months or longer to bridge it to a reasonable extent. This does mean that we should expect pullbacks from time to time. In view of the above, my bias is strongly bullish and my approach will be to keep buying the dips as they occur. I cannot see any reason for any other action. If you like my analysis, please give it a “thumbs up” and follow me to get immediate notifications. Always use sound money and risk management and stay patient in all your trades.
Long
by Trading_Vista
3
EUR/JPY tops 144 as ECB-BoJ gap widens: 149 in sight?The euro-yen exchange rate ( EUR/JPY ) hit new year-to-date highs, surpassing the psychological level of 144, as monetary policy divergences between the European Central Bank, which has already widely telegraphed its first rate hike in over a decade, and the Bank of Japan, which remains imprisoned by an extremely dovish monetary policy, widened further. The spread between the yield on a German 2-year bond and the Japanese equivalent – which acts as a proxy for measuring monetary policy divergences between countries – has now reached 0.7%, the highest since August 2011, exerting upward pressure on the EUR/JPY exchange rate. The Eurozone is now experiencing more inflationary pressures than Japan. Annual inflation in the Eurozone surged to 8.1% in May 2022, a new record high and well above market expectations of 7.7%, while consumer prices in Japan only grew by 2.5% year on year in April 2022. While the Bank of Japan can still tolerate the yen's depreciation – which has lost 16% versus the dollar and 11% against the euro since the start of the year– due to the presence of a relatively contained inflation, the ECB no longer has this luxury. The market is anxiously awaiting the ECB's meeting tomorrow. A rate rise in July is already priced in, and additional hawkish signals (such as leaving the door open to a 50 basis point raise or not ruling out quantitative tightening by the end of the year) may provide additional support for the euro versus the Japanese yen. Next barrier is 4% away at 149 levels, which corresponds to the EUR/JPY pair's December 2014 highs. Beyond this level, one may consider 153.8, which served as a major support level from 2007 to September 2008.
by Capitalcom
Dollar pushes wobbly yen to 130The Japanese yen continues to lose ground, as USD/JPY has punched above the symbolic 130 line. In the North American session, USD/JPY is trading at 130.01 up 1.02% on the day. The US dollar is having its way with the yen this week as USD/JPY has surged 2.23%. The driver behind the yen's plunge is an upswing in US Treasury yields. The 10-year yield rose from 2.84% to 2.93% today, and as we have often seen, the yen finds itself at the mercy of the US/Japan rate differential and is sharply lower today. Most of the major central banks have embarked on rate-hike cycles in order to contain spiralling inflation, with the noticeable exception of the Bank of Japan. The BoJ has continued its ultra-accommodative policy, which it insists is needed to boost the fragile economy. BoJ Governor Kuroda has defended keeping interest rates low, saying that wages and service price inflation have remained modest. The BoJ continues to view cost-push inflation as transient and is not all that concerned with inflationary pressures, which are much lower than we are seeing in the other major economies. In the US, the Fed commenced quantitative tightening this week and the Fed continues to send out hawkish messages. Fed Governor Christopher Waller fired the latest hawkish salvo from the US central bank, saying he supported more rate hikes, even above the "neutral level", which is not supportive or restrictive for growth. The Fed estimates the neutral level to be around 2.5%, which leaves plenty of room for further hikes until the neutral level is approached. Fed Chair Powell has signalled that the Fed will deliver 50-bps hikes in June and July, followed by a pause in September. USD/JPY has broken past resistance at 1.2890 and 1.2973. The next resistance line is at 131.24 There is support at 128.01
by OANDA
USD/JPY - Head and Shoulders Breakout?The rally in USDJPY from early March to early May was huge, driven by a combination of a soaring greenback and a BoJ determined to support its yield curve control policy tool. But the last couple of weeks have brought some relief in the pair, driven primarily by the dollar paring gains against the broader market. And the pair may have just broken below an interesting technical support level that could signal a more significant correction. A head and shoulders appears to have formed over the last month and the break of the neckline is potentially in progress. This also comes immediately following the break of the 200/233-period SMA band on the 4-hour chart which did provide support for most of the last week before finally giving way. If this breakout holds, it could potentially point to quite a significant correction based on the size of the head and shoulders formation and the projections that could indicate.
by OANDA
Japanese yen hits 20-year lowThe Japanese yen is slightly lower at the start of the week. In the Asian session, the yen fell as low as 131.35, which marked a 20-year low. The speed of the Japanese yen's depreciation has been remarkable, falling 12% against the US dollar in just three months. The formula for the yen's slide has been relatively simple - US Treasuries have been moving higher, while the BoJ has fiercely defended its yield control curve, capping the 10-year yield at 0.25%. Since the yen is extremely sensitive to the US/Japan rate differential, the dollar has pummelled the yen. Moving forward, the BoJ isn't about to change its stance and allow JGB yields to increase. The central bank is committed to an ultra-loose monetary policy and has been using debt financing, with the government's debt currently at a staggering 250% above GDP. This means it becomes a huge expense for the government if JGB yields move upwards. US Treasury yields continue to move higher, with the 10-year yield inching higher on Monday to 3.13%. The risk on USD/JPY remains tilted upwards, but the question is whether the BoJ will continue to sit on the sidelines and allow the yen to sink. Does the BoJ have a 'line in the sand' when it comes to the exchange rate? There had been talk of the 130-level triggering intervention, but that hasn't happened, as the BoJ and Japan's Ministry of Finance (MoF) have limited themselves to jawboning that they are monitoring the situation and are deeply worried about the yen's rapid descent. According to a BoFA note on Monday, 140 is a key line that could trigger yen intervention. The 140-level has held since 1998, and if breached, the MoF could respond and buy yen in order to stabilize the currency. In the meantime, the yen will likely continue to lose ground, with the Federal Reserve expected to continue to tighten at an aggressive pace. USD/JPY faces resistance at 1.3136 and 1.3218 Ther is support at 1.3000 and 1.2918
by OANDA