Japanese Government's Intervention Measures Aim to Curb Yen Depreciation

The Japanese government to prevent the domestic currency's sustained depreciation has constrained spot prices. Market participants are awaiting the release of the highly anticipated US monthly employment report (NFP) during the early North American session. The downside for the USD/JPY pair seems limited due to the Bank of Japan's (BoJ) dovish stance, as the BoJ has committed to maintaining its accommodative policy until achieving the 2% price target.

Furthermore, the BoJ's slight adjustment to its yield curve control (YCC) policy signals a gradual departure from its longstanding accommodative approach. This, combined with the ongoing risk-on sentiment, could weaken the safe-haven Japanese Yen (JPY) and provide support for the USD/JPY pair. However, it's prudent to exercise caution, as spot prices are still poised for modest weekly gains, and the overall fundamental backdrop suggests that aggressive bearish trading should be approached with care. Waiting for strong confirmation of a near-term peak around the 151.70 level, observed on Tuesday and the highest since October 2022, would be wise.

The USDJPY corrects back toward the 150.1 level from the 151.70 resistance level as the dollar is weak and also as BoJ's possibility of intervention is high. Volatility is still possible to be high especially as the price is beyond 150.00.