Yen Approaches 160 Against Dollar, Will Japan Tolerate a Move to 165 or 170?
Action Insight Daily Report 6-21-24 |
Yen Approaches 160 Against Dollar, Will Japan Tolerate a Move to 165 or 170? |
Yen is under intense scrutiny today as it continues a six-day losing streak, approaching the key psychological level of 160 against Dollar. This move comes despite Japan's core inflation reaccelerating in May, but failed to meet market expected pace. Additionally, core-core CPI, which excludes both food and energy, and services inflation both continued to decline. These mixed signals undermine the case for BoJ to consider raising interest rates again in July. Furthermore, BoJ has yet to clarify its stance on the tapering of bond purchases, adding to the market's uncertainty. As the Yen edges closer to 160 per Dollar, a level often associated with intervention by Japanese authorities, comments from Japanese officials suggest a more hands-off approach. Masato Kanda, Japan's top currency diplomat, reiterated that the authorities are prepared to counter speculative and highly volatile moves in the currency markets. But more importantly, he emphasized that intervention is "not intended to change the market's trend." He added that as long as currency rates move stably in line with economic fundamentals, there is no need for intervention. Kanda's comments could be interpreted by some that the authorities might tolerate further Yen depreciation, provided the movement is orderly and reflective of underlying economic conditions. So, Japan's reaction to USD/JPY at 160 in the next few days would be crucial to decide whether the intervention threshold has already moved up, say to 165 or 170... |
USD/JPY Daily Outlook Daily Pivots: (S1) 158.25; (P) 158.59; (R1) 159.28; More... USD/JPY's rise from 151.85 is still in progress and intraday bias stays on the upside. Further rally could be seen to 160.20 high, or possibly to 100% projection of 151.86 to 157.70 from 154.53 at 160.37. But upside should be limited there, at least on first attempt. On the downside, below 158.24 minor support will turn intraday bias neutral first. | |
GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
---|
23:00 | AUD | Manufacturing PMI Jun P | 47.5 | 49.7 | 23:00 | AUD | Services PMI Jun P | 51 | 52.5 | 23:01 | GBP | GfK Consumer Confidence Jun | -14 | -16 | -17 | 23:30 | JPY | National CPI Y/Y May | 2.80% | 2.50% | 23:30 | JPY | National CPI ex Fresh Food Y/Y May | 2.50% | 2.60% | 2.20% | 23:30 | JPY | National CPI ex Food Energy Y/Y May | 2.10% | 2.40% | 00:30 | JPY | Manufacturing PMI Jun P | 50.1 | 50.6 | 50.4 | 00:30 | JPY | Services PMI Jun P | 49.8 | 53.8 | 06:00 | GBP | Retail Sales M/M May | 1.50% | -2.30% | 06:00 | GBP | Public Sector Net Borrowing (GBP) May | 14.8B | 19.6B | 07:15 | EUR | France Manufacturing PMI Jun P | 46.8 | 46.4 | 07:15 | EUR | France Services PMI Jun P | 50 | 49.3 | 07:30 | EUR | Germany Manufacturing PMI Jun P | 46.4 | 45.4 | 07:30 | EUR | Germany Services PMI Jun P | 54.4 | 54.2 | 08:00 | EUR | Eurozone Manufacturing PMI Jun P | 48 | 47.3 | 08:00 | EUR | Eurozone Services PMI Jun P | 53.5 | 53.2 | 08:30 | GBP | Manufacturing PMI Jun P | 51 | 51.2 | 08:30 | GBP | Services PMI Jun P | 53.2 | 52.9 | 12:30 | CAD | Industrial Product Price M/M May | 0.40% | 1.50% | 12:30 | CAD | Raw Material Price Index May | -0.60% | 5.50% | 12:30 | CAD | Retail Sales M/M Apr | 0.90% | -0.20% | 12:30 | CAD | Retail Sales ex Autos M/M Apr | 0.50% | -0.60% | 13:45 | USD | Manufacturing PMI Jun P | 51 | 51.3 | 13:45 | USD | Services PMI Jun P | 53.5 | 54.8 | 14:00 | USD | Existing Home Sales May | 4.10M | 4.14M | 14:30 | USD | Natural Gas Storage | 69B | 74B |
|
|
|