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Emergency Meeting Called
JPY traders are on high alert after news that Japanese authorities will conduct an emergency meeting today over recent Yen weakness. The Ministry of Finance, Bank of Japan and the Japanese Financial Services Agency are due to hold their first three-way meeting since Q1 today as USDJPY pushed above 140 for the first time since November. No news details have been given and while no statement will be released after the meeting, the country’s top currency official Masato Kando will address reporters after the meeting.
Intervention Risks
The main risk here is that authorities take steps to intervene in order to help drive JPY higher. However, such intervention might not necessarily come today with today’s meeting likely to be a simple review of current market conditions and the tools available to prevent a further weakening if needed.
USD Strength
Along with hawkish Fed expectations which have driven USD higher, JPY has also been weakened by the sharp rally we’ve seen in stocks recently. With traders eyeing a likely US debt ceiling deal, stocks have been on a rampage which has severely weakened safe-haven support for the Yen, further driving the rally in USDJPY.
Near-Term View
While the address following today’s emergency meeting might have some short-lived downside impact on USDJPY, the broader bullish view is likely to remain intact while the US debt ceiling deal and hawkish Fed expectations remain the key focus.
Technical Views
USDJPY
The rally in USDJPY has seen the market breaking out above the 138.03 level. Price is currently stalled just ahead of the bull channel top. However, while 138.06 holds as support, the focus is on a further move higher in line with bullish momentum studies, targeting 145 as the bigger level.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.