Rumors surrounding the Bank of Japan are beginning to circle around 145.00 on USDJPY, how will this impact the market?
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USDJPY- Will The Bank of Japan Intervene At 145.00?
Rumors are swirling in the forex market regarding the potential intervention by the Bank of Japan (BoJ) if the USDJPY exchange rate reaches 145.00. Currently trading at 143.50, this critical level has garnered attention from traders and investors alike. In this blog post, we will explore the likelihood of intervention, taking into account historical precedents and the contrasting factors affecting the USDJPY pair.
The last time the BoJ intervened in the currency markets was when the USDJPY exchange rate soared to highs of 151.50, a level not seen since 1998. This move was prompted by the necessity to address excessive yen weakness and its potential negative impact on Japan’s export-dependent economy. It serves as a reminder of the BoJ’s willingness to take action when exchange rates become disruptive.
On the other side of the equation, the USD could continue to strengthen as the Federal Reserve Chairman has expressed intentions for further rate hikes to combat potential inflationary pressures. This divergence in monetary policy between the United States and Japan can significantly influence the USDJPY exchange rate.
As USDJPY hovers around the crucial level of 143.50, speculation about a potential intervention by the Bank of Japan at 145.00 is intensifying. The historical context of previous interventions and the contrasting factors affecting the USDJPY exchange rate warrant careful consideration. Traders and investors should monitor developments closely and assess the likelihood of intervention alongside the broader market trends and fundamental factors shaping the USDJPY pair.
The price on the chart has traded through multiple technical levels and some observations included:
- Price could reach the potential intervention levels at 145.00.
- If the BoJ intervenes here price could move lower towards the 142.00 support.
- If however, they do not intervene and the Fed remains hawkish, USDJPY could trade as high at 151.50.
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