Yen Gains Test Intervention Lows as USD/JPY Approaches Key Resistance
The Japanese Yen (JPY) has been steadily gaining against the US Dollar, with USD/JPY extending losses through prior intervention lows near 155. This technical development is seen as significant and potentially pointing to further Yen gains.
According to Scotiabank strategists Shaun Osborne and Eric Theoret, strong wage data from Japan and a heavily priced 25 bps Bank of Japan (BoJ) hike on September 18 have contributed to the JPY's recent strength. They highlight key support levels around 153 and 152.
The strategists note that resistance is now expected above 155, which suggests that USD/JPY may face challenges in breaking through this level. This could be a crucial test for policymakers as they lean on hawkish messaging ahead of the September 18 meeting.