USD/JPY Plunges to Four-Week Low Amid Intervention Fears
The USD/JPY pair has been under intense selling pressure for two consecutive days, plummeting to a nearly four-week low of 157.25-157.20 during the early European session on Thursday.
This sharp decline can be attributed to a combination of negative factors, including speculation about authorities conducting a rate check, which signals the possibility of an intervention to support the Japanese Yen (JPY), and a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.
The technical setup favors bears, with Wednesday's failed attempt to conquer the 200-period Simple Moving Average (SMA) on the 4-hour chart and the subsequent decline backing the case for a further near-term depreciating move.
Hence, some follow-through weakness below the 157.00 mark, towards testing the 156.60-156.50 horizontal support, looks like a distinct possibility.