Yen Continues to Weaken Despite Intervention Threats


The USDJPY currency pair continues its bullish run, extending gains for the fifth consecutive week. This bullish momentum comes despite a stronger-than-expected Japanese producer price inflation report (0.8% YoY). The Federal Reserve is expected to maintain a hawkish stance due to concerns over sticky inflation in the US. The upcoming US CPI data will be a key indicator, with a reading above 3.4% year-on-year likely solidifying expectations for continued rate hikes. Conversely, the Bank of Japan remains accommodative, with Governor Ueda reiterating a commitment to easy monetary policy despite rising producer prices. This divergence in central bank policy creates a supportive environment for the US dollar against the Japanese yen. 

Secondly, the Japanese government has expressed concerns about the rapid depreciation of the yen. Finance Minister Suzuki warned of potential intervention, raising anxieties amongst traders. However, a lack of concrete action and Governor Ueda’s downplaying of the need for immediate rate hikes suggest intervention remains a last resort. This keeps the focus on the interest rate differential, potentially driving the USDJPY currency pair higher. 

Technical Analysis 

The 4-hour chart shows that the price action trades above the 20-SMA (green line) and 50-SMA (blue line), with all three SMAs (including the 100-SMA) in an upward-sloping configuration, indicating a bullish trend. The RSI sits at 56.82, hovering around the midline, suggesting neither overbought nor oversold conditions. 

A potential break above the current price could see a challenge at the 23.60% Fibonacci extension level (152.238). A successful break above this level could open the door for a test of the 50.00% Fibonacci extension (152.356). Initial support lies at 151.019, with a break below potentially targeting the 150.308 level. Conversely, initial resistance sits at the all-time high of 151.97, with a confirmed break potentially leading to a test of the Fibonacci levels mentioned above. 


The USDJPY currency pair is likely to remain bullish in the near term. The fundamental backdrop favours the US dollar due to the contrasting monetary policies of the US Federal Reserve and the Bank of Japan. Technically, the price action sits above key moving averages with room for further upside. However, the threat of intervention by Japanese authorities and a neutral RSI reading introduce some uncertainty.  

Sources: TradingView, Trading Economics, Dow Jones Newswire, Bank of Japan 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.