Has Japan intervened to strengthen the yen?
With the USD/JPY having hit ¥150 speculation is swirling around the FX markets that Japan has intervened.
The last time the currency pair hit that level, back in October last year, the Japanese government, through the ministry of finance, and the Bank of Japan bought yen to support the ailing currency. IGTV’s Jeremy Naylor looks at the evidence.
USD/JPY
The trade between the USD/JPY experienced a significant increase, with the dollar reaching a value of 1.50 yen per dollar. People started to speculate that the Japanese government and Central Bank had intervened in the market to support the yen. This speculation was fueled by comments from finance officials who neither confirmed nor denied the intervention.
Market volatility
The market appeared to be volatile, as shown by the extreme movements on the candlestick chart, which further supported the idea of intervention by Japanese authorities. However, without official confirmation, it is unlikely that the dollar will decrease significantly or that the yen will strengthen further.
There is a chance that the trade may reach the 1.50 level again. The rise in the USD has been driven by its high yield and the weakening of the yen. The surge in the dollar-yen trade happened within just one hour, which is another sign of intervention. The market has since traded sideways, with support from the moving average. However, until there is official confirmation of Japanese intervention, the future direction of the trade remains uncertain.
The Japanese Yen
To explain it in simpler terms, the trade between the USD/JPY recently became more intense. People started thinking that the Japanese government and Central Bank might have stepped in to help the JPY This was supported by comments from finance officials who didn't really confirm or deny the intervention. The whole situation seemed pretty chaotic, with a lot of ups and downs in the market. But without clear proof of intervention, it's difficult to predict what will happen next. There's a chance that the trade will reach the same level it did before.
The USD
The rise in the value of the USD has been driven by its ability to make people money and the yen becoming weaker. All this craziness happened in just an hour, which gives more evidence of the Japanese intervention. After that, the market seemed to stabilize, helped by moving average support. But until we hear officially from Japan, we won't know for sure which way the trade will go.
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