Will Yen Strength Continue And Bring Down USDJPY?

14 juil. 2024

Reports of potential intervention (around 22BN) came across the wires as we closed out last week post CPI/PPI.

CPI data out the US fed into Dollar weakness on potential rate lowering. PPI Data didn't change this outlook, despite coming in higher.

Japanese Authorities were then reported to have intervened, propping up the Yen and supplying it the required strength to stymie the progression of the USDJPY to the upside.

Every single intervention has served simply as a means of slowing down the rise. Because monetary policy in the Japanese economic zone has remained the same (huge number of basis points apart) Buying of Dollar assets via sale of JPY has just continued the de-value of the JPY.

This will continue unless the BOJ undertakes a cycle of tightening and the FED lowers rates. Meetings to discuss either the former, or latter, are not until the end of the month.

To stop an immediate rise, further intervention would be required. Whether Japanese authorities will undertake this is debateable, but certainly, the downwards trajectory is to be continued in the near term, then it is needed. Otherwise, price will continue to highs.

In any case - whether they do, or do not. Just hold off until you are at key areas for value (back at highs, or back at your 200MA at least. These are safer measures within this current climate.

Wait until you have certainty of a continued change. Intervention is a temporary measure and will not change the long term trend. So if you wanted to buy now, you are still doing so at risk, because the fall via rumoured intervention has not been shocking to Markets.

It's important understand that the main attitude of the BOJ is to slow the rate of de-valuing over time, not particularly the ultimate value of price.

17 juil. 2024

Note

Further rumoured intervention, consider locking in some gains on the fall:

18 juil. 2024

Note

Further Weakness feeding in. Rebounds back up very insignificant.