US, Japan express concern over Japanese yen

The Japanese yen is almost unchanged on Thursday. In the North American session, USD/JPY is trading at 154.44, up 0.03%.

It’s a light data calendar today. US unemployment claims were unchanged at 212,000 and the Philly Fed Manufacturing index surged to 15.5 in April, up from 3.5 in March and crushing the market estimate of 1.5. Early on Friday, Japan releases CPI for March, which is expected to tick higher to 2.8%, up from 2.7% in February.

It was just over a week ago that I posed the question of whether the 152 level was a line in the sand which would trigger intervention from Tokyo. The yen has broken below 152 and then some, dropping this week to 154.78, a new 34-low. Japan’s Ministry of Finance hasn’t intervened but the threat continues to hover over the markets.

The decline of the yen prompted the finance ministers of the US and Japan to issue a statement expressing their concern at a G-20 meeting in Washington this week. US Treasury Secretary Yellen and Japanese Finance Minister Suzuki agreed to “consult closely” on exchange rates and acknowledged “serious concerns” over the yen’s sharp depreciation.

With Fed Chair Powell dampening expectations of a Fed rate cut due to rising inflation, the yen could lose even more ground, which will increase the possibility of intervention to prop up the yen. It has been a dismal few months for the yen, which has plunged 9.7% against the dollar in 2024.

USD/JPY Technical

• USD/JPY tested resistance at 154.43 earlier. Above, there is resistance at 154.71
• There is support at 154.11 and 153.83

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