TD Securities: USD/JPY Gains Limited Despite Interventions

TD Securities strategists have weighed in on the recent Japanese Ministry of Finance (MoF) interventions and joint US/Japan action talks, stating that they haven't changed the broader USD/JPY regime. They believe that the momentum will allow a brief dip towards 153.00, but expect the pair to hold above that level.

The strategists argue that in the absence of more hawkish Bank of Japan (BoJ) monetary policy and direct US involvement to intervene JPY, the combination of valuation, positioning, and trend-following suggests limited short-term USD/JPY downside. They see potential for a brief dip towards 153.00 but expect the pair to hold above that level.

The strategists' trend-following model shows that the USD/JPY trend has turned from an uptrend to neutral, but it is not yet in downtrend. Despite recent interventions and joint action talks, they maintain their year-end forecast of 159.00 for USD/JPY.