Japanese yen fails to attract buyers despite concerns about intervention and the risk-off impulse.
The Japanese yen (JPY) fails to capitalize on a minor increase versus the US dollar during the Asian session on Tuesday. Remaining well within striking distance of a multi-decade low reached last week.
The BoJ’s cautious outlook continues to undercut the JPY and support the USDJPY.
Japanese government officials resumed their jawboning to preserve the home currency. Which, combined with the risk-off impulse, proved to be crucial reasons in supporting the safe-haven JPY. That stated, the The Bank of Japan’s (BoJ) dovish view, indicating that monetary policy would stay easy for some time. Prevents JPY bulls from initiating aggressive wagers and limits any major gain.
Reduced bets on a June Fed rate drop drive the USD to a multi-week high and serve as a tailwind.
In contrast, the US Dollar (USD) is nearing its highest level since February 2024. Which was reached in the aftermath of positive US data on Monday. In fact, the Institute for Supply Management (ISM) indicated. That the United States manufacturing sector expanded in March for the first time since September 2022. This overshadows the US PCE Price Index on Friday. Which showed a slight increase in inflation in February, and leads investors to reduce their expectations for a Federal Reserve rate drop in June. This functions as a The dollar is benefiting from a tailwind, implying that the USDJPY pair’s path of least resistance is upward.
Daily Market Movers: Japanese Yen bulls remain on the sidelines despite intervention warnings and the risk-off atmosphere.
Speculation that Japanese authorities will intervene in the markets to strengthen the native currency lends some support to the Japanese Yen. But the Bank of Japan cautious view limits any significant gains.
Japan’s Finance Minister Shunichi Suzuki renewed his caution about the recent rapid JPY movements. Saying on Monday that he would respond appropriately and would not rule out methods to combat excessive volatility.
Reports of Israeli airplanes bombing Iran’s embassy in Syria heighten the prospect of a further escalation of geopolitical tensions in the Middle East. Dampening investors’ desire for riskier assets while benefiting the safe-haven JPY.
Reduced bets on a June Fed rate drop drive the USD to a multi-week high and serve as a tailwind.
Investors reduced their expectations that the Federal Reserve would cut interest rates in June after the Institute for Supply Management announced that the US manufacturing sector expanded in March, ending 16 months of recession.
The yield on rate-sensitive two-year and benchmark 10-year US government bonds rose to a two-week high following the positive data, propelling the US Dollar to a seven-week high and adding support to the USDJPY pair.
Traders are now looking to the US economic docket, which includes the release of JOLTS Job Openings and Factory Orders, and speeches by prominent FOMC members for some substantial momentum later during the North American session.
https://voiceoftraders.com/analysis/eurusd-sees-pressure-near-1-0800-ahead-of-a-data-packed-week
