Treasury Buyback Boosts Euro Against Yen

The US Treasury Department has announced plans to double the cap on long-term Treasury buyback operations to $4 billion per operation, effective from September 9 through November 4. This move has led to a decline in US long-term yields and a weakening of the US dollar, resulting in further gains for the euro against the yen.

The EUR/JPY pair is currently trading above all significant moving averages, with the current price of ¥185.59 above the 20-day (¥183.55), 50-day (¥184.56), and 200-day (¥184.49) levels. This bullish momentum is further supported by a bullish alignment of the 50-day and 200-day averages.

However, momentum signals are mixed, with the Moving Average Convergence Divergence (MACD) reading neutral, while the Average Directional Index (ADX) gives a sell forecast, suggesting weak trend conviction. The Relative Strength Index (RSI) and Commodity Channel Index (CCI) both point to a buy signal, but the Stochastic RSI and Bull/Bear Power (BBP) indicate overbought conditions.