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26/06/24
185
JPY Breaks 160 Against USD
The JPY has declined to its lowest level in 37 years. USD/JPY rose by over 0.6 percent to over 160.60 on June 26, representing a break beneath the psychological resistance level of 160. It has been trading close to that level over the past few days.
The eventual break beneath the lowest level since December 1986 has raised concerns that Japan’s apex bank will engage in another intervention in the currency markets. Markets believed that the Bank of Japan intervened on April 29 and May 1, selling some $61bn and buying JPY.
In recent days, Japanese officials sounded a note of warning regarding response to excessive volatility in the currency market. However, verbal intervention has not been able to save the JPY from falling.
The JPY has been struggling against the USD since the beginning of this year, falling by over 13.5 percent. The Federal Reserve is not planning to cut rates until September and the Bank of Japan is not giving signs of hiking rates.
Japanese authorities’ currency interventions gave the JPY some cushion for a while and has not been able to stop its steep depreciation. Japan’s retail sales data for May will be released on June 27, expected to come in at 2.0% relative to April’s 2.4%.
A look at the chart of USD/JPY shows pressure on the barrier level at 160.72. The immediate barrier level exists at 161.65. There are two support levels on the downside, including 158.94 and 158.01.
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