The Japanese Yen gives back half of what Tokyo bought
The Dollar has spent Wednesday grinding higher against the Yen with no headline to carry it, trading near 159.50 after a low just beneath 158.60 and a gain of under a tenth of a percent.
The Japanese Yen has returned half of the 8.45 trillion Yen Japan's Ministry of Finance spent in a single day. This marks the largest one-session operation on record, with approximately 5.3 trillion Yen added in the following days. The U.S. Treasury joined the second leg of this action, further bolstering the Yen's purchasing power.
Despite this, the Yen's value against the Dollar has rebounded, giving back roughly half of the 8.45 trillion Yen spent. The 200-day Exponential Moving Average now sits below the Yen's price, indicating a reversal from the downward trend. Japan and the U.S. have pledged to repeat this action, signaling a shift in their monetary policies.
The market is currently testing this new level, with resistance at the 160.00 handle and support at 159.00 and the 200-day EMA near 158.00. The Federal Reserve's interest rate band, set at 3.50% to 3.75%, is significantly higher than the Bank of Japan's rate of 1.00%, contributing to the Yen's rise. The Bank of Japan's decision to gradually abandon its ultra-loose monetary policy, coupled with cuts in other major central banks, is further supporting the Yen's strength.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
