Japanese Yen advances as Bessent expects further strengthening
USD/JPY declines 0.21% on Monday and trades around 159.80 at the time of writing, after briefly moving above the psychological 160.00 level.
The Japanese Yen (JPY) experienced a notable uptick on Monday, buoyed by US Treasury Secretary Scott Bessent's remarks that suggested the Japanese government and the Bank of Japan (BoJ) might bolster the currency. The USD/JPY pair, which had briefly surpassed the psychological 160.00 mark, settled at 159.80 by the time of reporting.
This move came amid persistent concerns about potential further intervention, following the currency's surge beyond its previous intervention level of 160.00. Japan's Ministry of Finance disclosed that it had spent a record ¥15.4 trillion between July 30 and August 26 to stabilize the currency, after it reached a multi-decade high near 164.00.
Despite expectations of a more cautious approach from the BoJ, the expansionary fiscal policy, significant government debt, and relatively low interest rates in Japan have limited the Yen's appreciation. Meanwhile, the US Dollar (USD) weakened, adding pressure to the USD/JPY pair. Traders are now monitoring upcoming US economic data, including the ISM Manufacturing PMI, JOLTS survey, and other releases, to gauge the impact on interest rate expectations.
The technical analysis shows USD/JPY holding a mildly bullish bias near the 100 and 200-hour SMAs, with key support and resistance levels identified around 159.55, 159.92, 159.47, and 159.17 respectively.
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