Knocking on 160’s Door Again

Taking advantage of the Yen's swift rebound.

USD/JPY continues to climb and retrace the losses from the FX intervention from the end of April. The 160.00 level is now firmly back in sight, setting us up for a compelling next couple of weeks of price action.

As we argued a few weeks ago in Between a Yen and a Hard Place , the trend for further Yen weakness is clear, given the unclear BoJ meeting, elevated inflation forecasts and general lack of conviction from the central bank that risks getting behind the curve.

Therefore, even though intervention risks above 160.00 rise again, the fundamental picture for the coming months does point to USD/JPY trading higher.