Japanese Yen rises again on finance minister's statements

Japan's finance minister addresses Yen weakness

By Raed Alkhedr | @raedalkhedr | 23 August 2023

USDJPY Library3242344
  • The USD/JPY pair falls below the 146.00 level

  • Anticipated Japanese authority intervention to strengthen domestic currency

  • Today, markets await performance data release for key US sectors

Impact of economic events on Japanese Yen movement

The Japanese yen has witnessed an ascent against most major currencies, prolonging its gains for a second consecutive session, driven by sustained buying at lower levels. Notably, the yen's dip below the 146 level against the US dollar has spurred expectations of Japanese authorities intervening to buttress the local currency. However, there haven't been substantial indications of such intervention thus far.

These increments have found further support in preceding statements from Japanese Finance Minister Taro Aso. He declared that Japan would undertake suitable measures in response to the yen's excessive fragility. This has instilled concerns among investors regarding the prospect of further involvement by Japanese authorities.

On a different note, the markets are eagerly awaiting the release of performance data for pivotal sectors within the United States today. Investors are also closely monitoring Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Economic Policy Symposium on Friday, hoping for clearer insights into the future path of monetary policy. This follows robust US economic data, which has heightened expectations of maintaining higher interest rates over an extended period.

Concerning trading, the US dollar has undergone slight declines against the Japanese yen at the commencement of today's session, with the currency pair trading near the 145.62 level.

Crucial technical levels impacting USD/JPY movement

Here are the pivotal technical levels that could exert influence on the fluctuations of the USD/JPY pair:

Having encountered resistance at the 146.50 level without managing to breach it, the pair has retraced its steps and is presently trading near the 145.40 mark. There is a possibility that this decline will persist, putting the support level at 145.00 to the test. In the event of a breach at this juncture, further downward movement towards the support levels at 143.50 and conceivably 141.70 may unfold.

Nevertheless, should the pair successfully maintain its position above the support level at 145.00 and initiate a rebound from it, prompting an assessment of the resistance level at 146.50, there exists potential for further upward momentum. This could potentially propel the pair towards the upper threshold of the ascending channel, hovering around the 148.50 level.

jpy 8-23-2023