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Oct 10 - 01:55 PM

USD/JPY - COMMENT-USD/JPY Closing In On 24-Year Highs Despite MoF Selling Threat

By Randolph Donney  —  Oct 10 - 11:45 AM

USD/JPY is up 0.26% on broader haven dollar demand, with Sept.
22's 24-year peak at 145.90 -- that triggered an MoF selling spike down to 140.90 -- now nearby.
And if 1998's 147.64 apex looks threatened, it could be another trip wire for possible Japanese intervention.

Prices were supported by Friday's decent U.S. jobs data nL1N3172NB, underpinning Fed rate hike expectations.
The haven dollar is broadly firmer Monday as the war in Ukraine intensifies nL8N31A0IM and global recession fears mount.

USD/JPY bulls' angst regarding potential Japanese intervention is moderated by the notion Japanese officials aren't trying to reverse the uptrend driven by Fed-BoJ policy divergence without the BoJ's help, but mostly just to tamp down sharp increases nT9N30702H.

While 145.90-6.00 remains pivotal, the much bigger pivot point is 1998's 147.64 peak on EBS, as that was the highest price since 1990.

Looking ahead, Thursday's U.S. CPI and Friday's retail sales reports, are the next major Fed policy drivers.
Treasury trading is closed for the U.S. holiday Monday, but the expected Fed funds ceiling has climbed to 4.7%, and 2-year Treasury-JGB yields spreads are likely to make new 22-year highs when Japanese and U.S. bond trading resumes Tuesday.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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