USD/JPY set to climb above 160 despite Japan's concerns
May 21 (Reuters) -USD/JPY will likely retest the recent multi-year 160.24 peak in the days and weeks ahead, despite Japan's concerns about yen weakness.
In a regular post-cabinet meeting press conference, Finance Minister Suzuki warned that the government would monitor the currency market closely and take appropriate action as necessary. He reiterated that foreign exchange rates should be set by markets, reflecting fundamentals, and that it was desirable for the currency to move in a stable manner.
As Bank of Japan rates are expected to remain below those of the Federal Reserve throughout 2024, according to the LSEG Interest Rate Probability App, that should continue to boost USD/JPY.
USD/JPY has managed to register 6 weekly closes in a row above the 152.60 Fibo, a 38.2% retrace of the major 277.65 to 75.31 (1982 to 2011) drop, which should eventually lead to sizeable gains back above 160. The 30- and 60-day correlations between USD/JPY and EUR/JPY are both above +0.80, meaning EUR/JPY will likely head higher also.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)
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