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29 April 2024 | FXGT.com

Japanese Yen Surges 500 Pips in Dramatic Reversal Amid Intervention Speculation

  • Dramatic Recovery: The Japanese Yen made a significant comeback after the USD/JPY pair reached the critical ¥160.00 level during Monday’s Asian session, marking the yen’s lowest point since October 1986. Following this, the yen rallied almost 500 pips within an hour during the early European session, indicating a substantial recovery.

  • Possible Intervention: The sharp intraday bounce might have been influenced by a potential intervention by Japanese authorities aimed at bolstering the Yen, though no official statement has confirmed this.

  • Immediate Support: The USD/JPY pair’s sharp pullback showed signs of support above last week’s low at ¥155. This level may now act as a pivotal point for determining future price movements.

  • Monetary Policy Divergence: The Bank of Japan (BoJ) maintains a cautious approach towards tightening monetary policy, in contrast to the Federal Reserve (Fed), which may delay rate cuts due to persistent inflation. This divergence is likely to maintain a wide gap in interest rates between the US and Japan, capping potential gains for the JPY.

  • Economic Events Outlook: Key upcoming events such as the FOMC monetary policy meeting and the US Nonfarm Payrolls report are expected to provide fresh volatility for the USD/JPY pair.

  • Investor Strategy: Given the market’s unpredictability and potential for governmental intervention, investors should remain vigilant and responsive to any new economic data or policy announcements that could affect the currency pair.

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