Japan's USD/JPY intervention may well have worked
July 25 (Reuters) - Japan's recent interventions to sell the dollar and buy yen have pushed USD/JPY into bearish territory and darkened its chart outlook, suggesting even bigger moves may lie ahead.
Japanese buying to defend the yen is becoming a standard feature of the FX landscape in 2024, but authorities in Tokyo have switched up their methods, making it trickier for investors to second-guess when and how they might step in.
It seems to have worked. The yen has strengthened, pushing USD/JPY below the Japanese Ichimoku daily cloud that currently spans the 155.94-156.81 region.
Scope is growing for a bigger USD/JPY slide to retest May's 151.86 low. The bearish outlook is reinforced by a negative fourteen-day momentum reading. As 30- and 60-day correlations between USD/JPY and EUR/JPY are both above +0.80, that will likely see EUR/JPY slump with USD/JPY in coming sessions.
For more click on FXBUZ
Daily Chart: https://tmsnrt.rs/4flD5Kz
Correlation Chart: https://tmsnrt.rs/3SimHk3
(Martin Miller is a Reuters market analyst. The views expressed are his own)
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