The Japanese Yen (JPY) has rebounded modestly overnight following yesterday’s sharp sell-off. This has resulted in USD/JPY retreating closer to the 152.00 level after hitting an intraday high of 153.19 yesterday, notes MUFG FX analyst Lee Hardman.
Trump’s victory may trigger another move higher for USD/JPY
“So far this month, USD/JPY is up just over 6%, representing the strongest equivalent period of gains since late August/early September 2022. It was then quickly followed by Japan’s intervention to support the JPY in September and October 2022. In light of the recent price action, there is growing speculation about the possibility of another round of intervention by Japan, although it seems unlikely before the US elections. , as a Trump victory and a red sweep could trigger another move higher for USD/JPY.”
“Market speculation about further intervention by Japan was encouraged overnight by comments from Finance Minister Kato, who stated that ‘we are seeing rapid and unilateral movements’ in foreign exchange markets, and emphasized that ‘we will closely monitor ‘close the foreign exchange market with a stronger sense of urgency, including policing speculative trading.'”
“The comments have helped provide temporary support for the JPY overnight, but the gains are likely to be short-lived if US yields and the US dollar continue to adjust higher ahead of the US elections.” in anticipation of a Trump victory and a red sweep.”
Source: Fx Street
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