Japanese Yen extends to Intraday losses vs USD; Intervention fears may limit the decline.

The Japanese yen (JPY) met with fresh supply during the Asian session on Friday. And appears to have stopped its rebound from the YTD low reached versus the US dollar (USD) earlier this week. The underlying positive tone around the equities markets. Combined with the uncertainty regarding the expected timing of when the Bank of Japan (BoJ) will leave the negative interest rate policy. Which might undermine the safe haven JPY.

A bullish risk tone, along with uncertainties regarding the Bank of Japan’s policy move, undermines the safe-haven JPY.

Aside from that, recovering USD demand, aided by an increase in US Treasury bond yields. Propels the USDJPY pair above the 150.00 psychological level. However, the worse US Retail Sales data reported on Thursday. Reignited expectations that the Federal Reserve (Fed) may soon begin decreasing interest rates. This, in turn, may deter USD bulls from initiating aggressive wagers and cap the currency pair amid fears of a potential intervention by Japanese authorities.
Market investors are now looking to the US economic calendar. Which includes the release of the Producer Price Index (PPI). Housing Starts, and the Preliminary Michigan Consumer Sentiment Index. This, combined with speeches by Influential FOMC members will drive the USD and add new momentum to the USDJPY pairing. Nonetheless, spot prices appear to be on track for a seventh consecutive week of rises. With the highest weekly close since early November.

Daily Market Movers: Japanese Yen under pressure from BoJ uncertainty and diminished safe haven demand.

Reduced wagers on an imminent move in the Bank of Japan’s monetary stance, combined with a risk-on mentality, have failed to help the safe-haven Japanese yen build on a two-day recovery trend from the year-to-date low.
Japan’s economy unexpectedly declined in the fourth quarter due to poor domestic demand and entered a recession, potentially derailing the BoJ’s goal to leave its ultra-easy policy this year.
Investors seemed bullish after the US macro data released on Thursday indicated probable signs of deterioration in consumer spending, fueling anticipation for an early rate cut by the Federal Reserve.
According to the Commerce Department, retail sales fell sharply by 0.8% in January, exceeding the predicted 0.1% drop, while sales excluding autos fell by 0.6%.
According to the CME Group’s FedWatch Tool, betting on a rate decrease of at least 25 basis points in May increased to 40%, while the odds on such a move in June stood at around 80% following the data.
A separate survey revealed that import prices registered their highest growth in nearly two years, jumped by 0.8% this month, although decreased by 1.3% over the preceding Twelve months until January.
Meanwhile, the number of Americans filing for unemployment benefits fell by 8K from 220K the previous week to a one-month low of 212K in the week ending February 10.
Atlanta Fed President Bostic said on Thursday that the US central bank has made significant headway in decreasing inflation and would soon consider dropping interest rates, despite the fact that a robust economy calls for patience.
The yield on the benchmark 10-year US government bond remains above 4.0%, allowing the USD to halt its corrective slide from a multi-month high and delivering a minor boost to the USDJPY pair.

Investors are now looking at the US Producer Price Index.

Investors are now looking at the US Producer Price Index (PPI). Which is predicted to fall to 0.6% YoY from 1.0% before. Seeking new indications on the Fed’s future policy decisions and rate-cutting course.
Friday’s US economic calendar also includes the release of Housing Starts. And the Preliminary Michigan Consumer Sentiment Index. Which, combined with remarks by Fed members, should provide some traction.
Japan’s Finance Minister Shunichi Suzuki underlined on Friday that the government will constantly monitor FX movements. And that currencies should fluctuate in a stable way, reflecting fundamentals.