The USD/JPY pair is trading near 160.00, marking its third consecutive weekly gain with a 0.91% rise. While growing Federal Reserve rate-hike expectations continue to widen the US-Japan yield gap, Japanese Prime Minister Sanae Takaichi has signaled potential intervention to maintain an orderly market.
Bullish
🤖 65%
The pair is up 0.91% this week, on track for a third straight weekly gain, and trades just below 160.00 after breaking above the 100-day SMA at 158.97 and 200-day SMA at 158.74. Growing bets on further Fed rate hikes keep the yield gap in the Dollar's favour, and Commerzbank sees little yen potential, expecting only a slight pullback to 155 by mid-next year. Rising intervention risk from the Japanese government after PM Takaichi's warning about an orderly FX market is the main cap on further gains.
Catalysts
- ▲ Pair tests the 160.00 resistance level after a third straight weekly gain
- ▲ Growing Fed rate-hike bets widening the US-Japan yield gap
Risk Factors
- ▼ Japanese PM Takaichi pledged to preserve an orderly FX market and is in close contact with US authorities, signalling possible intervention near 160.00
- ▼ Technical resistance at 160.00, then 161.00 and 162.00 where prior supply may re-emerge