Japanese Yen recovers from three-week low vs USD amid looming intervention risk

USD/JPY attracts some sellers as JPY bears turn cautious amid intervention fears.
Iran diplomacy hopes prompt some USD profit-taking and also weigh on the pair.
The fundamental backdrop backs the case for the emergence of some dip-buying.

The USD/JPY pair drifts lower during the Asian session on Friday, stalling its recent strong move up to a three-week high, near the 159.00 mark, touched the previous day. Nevertheless, spot prices remain on track to register strong gains for the second week in a row and currently trade just above mid-158.00s, down around 0.20% for the day.

Análisis de TMGM: noticias de mercados financieros, calendario económico e información del mercado

Intervention risk re-emerged as a two-week-long slide drags the Japanese Yen (JPY) back toward the critical 160.00 psychological threshold against its American counterpart. Furthermore, the US Dollar (USD) pauses for a breather following the recent strong move up to a nearly two-month high. This prompts bullish traders to take some profits off the table, exerting some pressure on the USD/JPY pair.

Meanwhile, the USD pullback comes amid reports that the US and Iran were exploring a phased deal to reopen the Strait of Hormuz. However, a Houthi missile attack on Saudi Arabia keeps geopolitical risks elevated, fueling oil-driven inflation fears. This, along with the hawkish Federal Reserve (Fed), continues to push US bond yields to multi-year highs, supporting the USD and the USD/JPY pair.

Moreover, the interest rate gap between the US and Japan remains wide, at roughly 250 to 275 basis points (bps). This should keep the so-called JPY carry trade in play, which should contribute to limiting the downside for the USD/JPY pair. Hence, any further slide is likely to be bought into and remain limited. Traders now look to the US macro data and Fed speeches for some impetus heading into the weekend.

USD/JPY 4-hour chart

Technical Analysis

The USD/JPY pair maintains a bullish near-term bias following the overnight breakout above the 200-period Simple Moving Average (SMA) on the 4-hour chart and the 50.0% Fibonacci retracement. The latter is located at 158.45 and should offer immediate support, ahead of the 200-period SMA at 157.59.

On the topside, immediate resistance is seen at the 61.8% Fibo. retracement at 159.76, followed by the 78.6% retracement at 161.62, with the cycle high zone at 163.99 acting as a broader cap.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.02%	0.01%	-0.30%	0.03%	-0.02%	0.06%	0.06%
EUR	-0.02%		0.00%	-0.32%	0.01%	-0.05%	0.02%	0.02%
GBP	-0.01%	-0.00%		-0.31%	0.02%	-0.04%	0.04%	0.03%
JPY	0.30%	0.32%	0.31%		0.34%	0.27%	0.34%	0.34%
CAD	-0.03%	-0.01%	-0.02%	-0.34%		-0.07%	0.00%	0.00%
AUD	0.02%	0.05%	0.04%	-0.27%	0.07%		0.08%	0.07%
NZD	-0.06%	-0.02%	-0.04%	-0.34%	-0.00%	-0.08%		0.00%
CHF	-0.06%	-0.02%	-0.03%	-0.34%	-0.00%	-0.07%	-0.00%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

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