USDJPY Plummets After Japan's Intervention: What to Watch for Next
The US dollar-yen pair (USDJPY) has seen a significant decline after Japan's intervention, dropping almost 5% to near May's low around 155. This marks a major technical shift as USDJPY has fallen below its 200-day simple moving average (SMA) for the first time in nearly a year.
The Bank of Japan's move is seen as more meaningful than previous interventions, but history suggests that such moves can fade if the central bank does not signal further rate hikes with confidence. The upcoming US nonfarm payrolls report on Friday will be closely watched to gauge the Fed's future policy decisions.
Traders expect a muted increase of 83k in July payrolls, which could drag USDJPY towards 153.95. A payroll growth above 100k could help the pair reclaim its 200-day SMA at 157.80.