Today’s price action highlights how big of a problem that Japanese authorities have on their hand. Even with a broader US dollar selloff on weaker economic data and dipping Treasury yields, USD/JPY barely blinked.
USDJPY 10 mins
The pair fell to 154.58 and that 20-pip decline was plenty for the aggressive buyers of the pair who are betting the MOF won’t intervene. Moreover, it highlights that fundamentals are backing the pair and will make it very tough for anyone to block the path above 155.
Now I think that eventually the US economy will cool and the Fed will cut but it’s going to take more than today’s soft-ish S&P Global PMI.