Japanese Yen: Psychological resistance and intervention fears – MUFG
MUFG’s Teppei Ino reviews recent USD/JPY trading ahead of Jackson Hole. The pair opened near 159 and repeatedly tested the 160 level, which acted as psychological resistance as traders watched for possible Japanese intervention.
On 17 August, the USD/JPY pair opened at 159.19 and quickly tested the 160 level, which acted as psychological resistance for traders. The pair briefly dropped to 158 before recovering due to improving US economic data and rising oil prices. As the week progressed, the pair edged higher, reaching a high of 159.78 on 18 August before struggling to extend gains at the psychological resistance level of 160.
On 19 August, the pair gradually fell back toward 159 as traders watched for possible Japanese intervention. The announcement of US Treasury plans to expand UST buybacks from September on 20 August triggered broad-based dollar selling, pushing the pair to a low of 158.03. Despite the setback, the USD/JPY rebounded as UST yields recovered, returning to above 159. By 21 August, the pair was top-heavy around 159.
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