USDJPY retreats after reaching a new YTD peak, snapping a three-day winning run.

The USDJPY pair draws intraday sellers in the 147.80 level. Or a new high since November 2022 set on Tuesday. And appears to have broken a three-day winning run for the time being. Spot prices, on the other hand, manage to cling above the Asian session low. And are now trading around the 147.55 zone. Down slightly more than 0.10% for the day.

Fears of intervention and a milder risk tone support the USDJPY and impose pressure on the pair.

Masato Kanda, Japan’s senior currency diplomat, has warned against the recent drop in the Japanese Yen (JPY). He stated that if speculative swings in the currency market continue. Authorities will not rule out any measures. This, together with the cautious market sentiment, boosts the JPY’s safe-haven reputation while putting downward pressure on the USDJPY pair. A private poll released on Tuesday revealed that business activity in China’s services sector rose at its weakest rate in eight months. Fueling concerns about the world’s second-largest economy’s deterioration. Aside from that, prolonged trade tensions between the United States. And China dampen investors’ desire for riskier assets.

The divergence in policy positions between the BoJ and the Fed should help minimize any major corrective drop.

In the most recent development, US Secretary of Commerce Gina Raimondo stated. That she does not foresee any adjustments to the Trump administration’s tariffs placed on China until the continuing examination by the US Treasury is completed. Having saying that, any significant. A USDJPY corrective slide is elusive in the aftermath of a significant difference in the monetary policy stances made by the Bank of Japan (BoJ). And other major central banks, particularly the Federal Reserve (Fed). It is worth noting that the Bank of Japan is the only central bank. In the world with negative interest rates and is largely expected to retain its ultra-easy monetary policy.

The views were reinforced by remarks made by BoJ policymaker Hajime Takata on Wednesday. Who stated that the central bank must be patient in maintaining loose policy given the high level of uncertainty in the forecast. In contrast. The Fed is expected to maintain interest rates higher for a longer period of time. Furthermore, markets are still factoring in the likelihood of another 25 basis point cut. The hawkish view remains supportive of rising US Treasury bond rates. Which benefits USD bulls and could help limit losses for the USDJPY pair.

Market players are now anticipating the publication of the US ISM Non Manufacturing PMI.

Market players are now anticipating the publication of the US ISM Non Manufacturing PMI, which is scheduled for later in the early North American session. Along with US bond rates, this will affect USD price dynamics and offer some momentum to the USDJPY pair. Traders will also look for short-term opportunities based on wider risk sentiment.

Nonetheless, the aforementioned fundamental backdrop appears to be heavily skewed in favor of bulls, implying that the path of least resistance for current prices is to the upward.