Japanese Yen continues to benefit from rumored government intervention.
On Friday, the Japanese Yen (JPY) strengthened against the US dollar for the third day in a row, closing close on a three-week high as the European session began.
The USDJPY pair is also under pressure due to post-FOMC USD selling.
Speculation that Japan’s financial authorities intervened again on Thursday, for the second time this week, with the purpose of propping up the home currency, continues to strengthen the JPY. This, combined with the post-FOMC US Dollar (USD) The selling bias puts extra downward pressure on the USDJPY pair.
Investors are now looking forward to the important US NFP report for a new directional impulse.
Meanwhile, investors appear to believe that the interest rate divergence between Japan and the United States (US) will stay wide for the foreseeable future. This, combined with a generally optimistic tone in the equity markets, is seen as a headwind for the safe-haven JPY, limiting the downside for the USDJPY pair. Furthermore, traders were hesitant to make aggressive directional wagers, preferring to wait for the release of the crucial US Nonfarm Payrolls (NFP) report later today.
Daily Market Movers: The Japanese yen continues to profit from recent government initiatives.
Bank of Japan data revealed on Thursday that Japanese officials may have spent roughly ¥3.66 trillion on Wednesday to bolster the Japan’s top currency diplomat, Masato Kanda, declined to confirm intervention and said the Ministry of Finance will disclose data at the end of this month. The Federal Reserve dismissed the prospect of further interest rate hikes despite sticky inflation, which weighs on the US Dollar and exerts pressure on the USDJPY pair. Fed Chair Jerome Powell flagged JPY bulls from making aggressive bets.
Shunichi Suzuki, Japan’s finance minister, and Kazuo Ueda, the Bank of Japan Governor, will have a press conference on the sidelines of the ADB meeting at 13:45 GMT, which could provide some impetus.
Later in the North American session, the release of US jobs data, also known as the Nonfarm Payrolls (NFP) report, may influence the USD and decide the USDJPY pair’s near-term trajectory.
