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EBC Markets Briefing | Yen at critical point with 160 under threat

The Japanese yen hit its weakest levels since April 1990 on Monday and hovered around the critical 160 mark. Markets are on guard for any intervention by Japanese authorities against the rout. The yen saw its biggest drop in six months in the last trading session as the BOJ offered no indication it was in a hurry to respond. There are also downward pressures from “King Dollar.” The debate for the Fed is beginning to shift from how many times to cut interest rates this year to whether to cut them at all in 2024. All the data so far is showing US inflation has stopped cooling. Concerns about the negative effects of the weak yen, such as higher import costs and weaker consumer sentiment, are growing in the business community. Therefore, the officials should act sooner than later. The nation conducted its first yen-buying intervention since 1998 in Sep 2022 when then Governor Haruhiko Kuroda made dovish comments following a policy decision. We are now in a similar situation. Investors are bracing for a sharp rally out of intervention. Appetite for options that pay out on a sizable move in the Japanese currency in either direction is at the highest level since October 2022. The yen could hardly fall beyond 160 per dollar anytime soon as history is expected to repeat itself and as RSI has climbed to nearly 90. That being said, it may need to clear 152 to bolster the bullish view. EBC Fintech Development Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation byEBC Fintech Development or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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Investment involves risk. The content of this report is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.

Publication date:

2024-04-29 08:14:09 (GMT)

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