USD/JPY Balances US Rate Hikes and Japanese Intervention Fears
The USD/JPY currency pair has been hovering around 157.40, reflecting a balance between expectations of further US monetary tightening and concerns over potential Japanese intervention.
Japan's Finance Minister Satsuki Katayama emphasized the importance of avoiding an undervalued yen, citing an agreement with US Treasury Secretary Scott Bessent to strengthen bilateral cooperation.
The Bank of Japan has been tightening its policy, raising its benchmark rate to 1.25% on September 18, which is seen as a fundamental floor for the Yen's value.
Traders are advised to take a defensive posture and consider buying put options or downside barrier options targeting support zones at 156.50 and 155.50, given the risk of sudden downward spikes due to joint intervention by Japanese and US authorities.