USDJPY is approaching the previous intervention levels, as the Bank of Japan’s bond limit adjustment failed to satisfy the Yen bulls enough to halt the decline. As USDJPY approaches the previous highs, speculation about another possible intervention has resurfaced. Finance Minister Shunichi has stated that they are monitoring the currency and will take action if they observe excessive movements in the FX market.
Today’s GDP has significantly exceeded estimates, coming in at 1.5% for the second quarter, equivalent to a 6% annualized rate. The market’s expectation was a 0.8% quarterly increase. Despite the stronger-than-expected growth, traders remain unsatisfied. This is mainly due to the surprise arising from overseas demand, which is anticipated to decline in the upcoming months, while domestic demand remains weak.
From a technical perspective, the 145-146.12 zone could act as a critical resistance. If this zone is surpassed, USDJPY might experience some “excessive movements” towards the upper boundary of the trend channel, currently situated at 148.25. Subsequently, USDJPY will be susceptible to potential interventions. The absence of intervention might push the price towards around 150, the previous peak. Conversely, a downward wave within the uptrend channel could create a healthier trading environment.
