- USD/JPY found further gains as Yen recedes post-”Yentervention”.
- US consumer sentiment survey results due on Friday.
- BoJ remains tight-lipped on FX market interventions.
USD/JPY drifted higher on Wednesday, marking in a third straight day of easy gains as the pair pares away recent losses from two suspected “Yenterventions” by the Bank of Japan (BoJ). The Yen has battled back from multi-decade lows, but progress is limited as the JPY resumes deflating across the board.
The US economic data docket is fairly light this week, with only mid-tier data on the offering until Friday’s University of Michigan Consumer Sentiment Index. The UoM’s indexed survey of consumer economic expectations for May is expected to tick down to 76.0 MoM compared to the previous month’s 77.2. The UoM Consumer Sentiment Survey hit a two-and-a-half year high of 79.4 in March.
The BoJ has gone to great lengths to neither confirm nor deny that the Japanese central bank undertook two separate currency interventions on behalf of the Japanese Yen (JPY) last week, but market participants noted that BoJ market operation reporting wildly overshot estimates, with the BoJ overspending on miscellaneous financing operations by around nine billion Yen in the first half of last week.
The economic calendar remains relatively thin for the rest of the week, and USD/JPY traders will be looking ahead to a fresh round of inflation figures from the US next week, as well as Japan’s latest Gross Domestic Product (GDP) growth figures due early next Thursday.
USD/JPY technical outlook
USD/JPY has climbed back over the 200-hour Exponential Moving Average (EMA) at 155.04 in the mid-week market session, ticking into a fresh high near 155.70 and set for a run at the 156.00 handle. The pair has risen around 2.5% unimpeded from last week’s swing low below 152.00.
USD/JPY closed on a third consecutive trading day in the green on Wednesday, and despite possible “Yenterventions”, the pair found technical support from the 50-day EMA at 152.72 and continues to trade well into bull country. The pair is up over 10% for the year.
USD/JPY hourly chart
USD/JPY daily chart
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