USD/JPY struggles to recapture 150.00 as fears of BoJ’s intervention remain intact
|- USD/JPY fails to recapture 150.00 for now as profit-booking hits US Dollar, more upside seems favored.
- Broader appeal for the US Dollar is still bullish amid resilient US economy and Fed’s hawkish stance.
- The Japanese Yen may discover strength if BoJ intervenes.
The USD/JPY pair faced nominal sell-off while attempting to recapture the psychological resistance of 150.00 on Thursday. The asset corrects marginally, following footprints of the US Dollar Index (DXY), which faces long liquidation after printing a afresh 10-month high at 106.80.
S&P500 futures generated some gains in the London session, portraying some improvement in the risk-appetite of the market participants. US equities ended on a flat note on Wednesday amid caution about Federal Reserve’s (Fed) interest rate outlook. The US Dollar Index (DXY) corrects gradually to near 106.30 after failing to stretch rally.
Broader appeal for the US Dollar is still bullish as the United States economy is resilient due to declining inflation, stable labor growth and robust consumer spending. Unlike other G7 economies, which are struggling for a firm footing due to their inability in coping with the consequences of higher interest rates by central bankers.
The US economy has been showing excellence on the grounds of labor market, households’ demand, and inflation but its Manufacturing PMI have been contracting consistently from past 10 months. Investors anticipate a recovery in factory activities ahead as order book for core goods surprisingly expanded in August. The Durable Goods Orders rose by 0.2% while investors anticipated a decline by 0.5%. In July, Orders were contracted sharply by 5.6%.
The Japanese Yen may strengthen on the potential intervention of the Bank of Japan (BoJ). Japanese Finance Minister Shunichi Suzuki reiterated on Thursday, he won't rule out any steps to respond if there's any excessive FX volatility. He further added, the authority is closely watching FX moves with sense of urgency.
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