- USD/JPY advances and prepares to end the week with gains of almost 2.80%.
- Policy makers at the Fed are focused on taming inflation towards their 2% target.
- The Japanese authorities remain nervous due to the high volatility in the foreign exchange markets.
The USD/JPY rose for the fourth day in a row, though retreating from Wednesday’s high of 144.99, holding on to the 144.00 figure, after Fed officials reiterated their commitment to bring inflation down towards their 2% target.
During the day, USD/JPY started trading near the 144.00 figure, rising late in the Asian session towards the daily high. However, it fell towards the daily low at 143.32, but Powell’s remarks from the Fed before the opening of Wall Street strengthened the USD/JPY above 144.00. At the time of writing, the USD/JPY is trading at 144.00.
USD/JPY rises on bullish mood, hitting a 24-year high around 145.00
Risk appetite is positive during the session on Thursday. Fed officials throughout the day stood firm on fighting inflation, with Fed Chairman Jerome Powell stressing that the Fed needs to act frankly, strongly as we have been doing.”
As for the data, the US Bureau of Labor Statistics revealed that jobless claims for the week ending September 3 fell to 222,000 from an estimated 235,000, showing that the job market remains tight. solid. The four-week moving average, which smoothes out volatile moves from week to week, fell to 233,000, the lowest since early July.
On Japan’s side, Deputy Finance Minister for International Affairs Masato Kanda said, “Volatility is increasing recently in the foreign exchange market. Especially in recent days, we have seen rapid and one-sided declines in the yen fueled by speculative moves. It is clearly a move that can be described as excess volatility.”
“The recent rapid movements of the yen cannot be justified by fundamentals,” Kanda added after attending a meeting with officials from the Ministry of Finance, the Bank of Japan (BoJ) and the Financial Services Agency (FSA).
Meanwhile, USD/JPY has pulled back from around 145.00 due to overloading towards 24-year highs. Furthermore, the Relative Strength Index (RSI) in overbought conditions stands at 78.58, but its slope is still pointing upwards, which means that the buying pressure remains. However, Japanese authorities threatening to intervene in the forex market could prevent USD/JPY traders from opening long bets on the pair.
Technical levels
Source: Fx Street
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