Daily Analysis USDJPY - 6 July 2023

The USD/JPY pair reached a new weekly low at 143.60 due to increased concerns about intervention in the currency market by the Bank of Japan (BoJ). Meanwhile, the US Dollar Index rose to a four-day high of 103.40 as investors believe that a 25 basis points (bps) interest rate hike by the Federal Reserve is possible.

The recently released minutes of the Federal Open Market Committee (FOMC) meeting revealed a mixed sentiment among policymakers regarding a potential small interest rate hike or keeping rates unchanged. The uncertainty stems from the elevated inflation levels and the time it will take to reach the target of 2%.

In the meantime, there is growing fear of intervention in the foreign exchange (FX) market by the BoJ or Japanese diplomats, as the Japanese Yen has depreciated to 145.00 against the US Dollar. A Reuters poll previously indicated that intervention could occur if the Japanese Yen falls to 145.00 against the US Dollar.

The USD/JPY has reached 145.00, indicating a bearish price accumulation that suggests the market is currently seeking a correction in the short-term, potentially due to concerns of intervention around these levels. The subsequent notable support level lies at 142.2, towards which the price may undergo a correction.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
147.00	146.00	145.00	143.60	142.20	141.20