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Mar 20 - 05:55 PM

USD/JPY - Knocked Away From Run At 32-Year Highs By Fed, BoJ Story

By Randolph Donney  —  Mar 20 - 03:40 PM
  • Before the Fed events, USD/JPY rose toward 2023/22's 151.92/4 peaks

  • But Fed clinging to 3, rather than just 2 2024 dot plot cuts weighed

  • And just as Fed news hit, Nikkei ran a yen supportive BoJ story

  • But BoJ was already seen possibly doing 10-20bp of further 2024 hikes

  • Main cause of the 151.80-150.735 drop was post-Fed dive in S-T US ylds

  • Long P/T after 146.48-151.82 March rebound also a factor

  • Beyond the 32-yr highs, 152 is seen as a major options pivot point

  • A breakout above 152 could target twin Fibo targets by 155.20

  • US data, Tsy yield spreads above JGB yields remain crucial for USD/JPY

  • USD/JPY rose 149-151.82 Tues-Wed despite a pre-Fed Tsy yld pullback

  • Biggest risk for yen shorts S-T is MoF intervention to bolster the yen

  • That and March U.S. data veering clearly toward more Fed easing

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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