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Possible Interventions by the Bank of Japan Support the Yen

9/15/2022 12:24 PM

The US dollar shows a slight increase, again testing the level of 143.50 for a breakout. The day before, the USD/JPY pair showed negative dynamics, and did not approach the psychological level of 145.00.

The financial authorities of Japan are concerned about the rapid depreciation of the national currency, which last week reached the 1998 lows. According to the Governor of the Bank of Japan, Haruhiko Kuroda, volatility destabilizes business activity and increases market uncertainty. Currency interventions can strengthen the position of the yen, as Finance Minister Shunichi Suzuki announced the day before, recognizing the positive effect of the long downward movement of quotations. In particular, foreign citizens will be able to spend more money while in the country, since the exchange rate difference contributes to the price correction in their national currency. The Bank of Japan is forced to maintain negative interest rates as inflation remains below its 2.0% target.

The macroeconomic statistics released today do not have a significant impact on the dynamics of the instrument: in August, Export volumes increased from 19.0% to 22.1%, which turned out to be slightly lower than analysts' expectations at the level of 23.6%, while Imports accelerated by almost 50.0% over the same period, which led to an increase in the Trade Balance deficit in August from 1433.9 billion Japanese yen to 2817.3 billion Japanese yen.

Bollinger Bands in D1 chart show active growth. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, having retreated from its highs last week, is again trying to reverse towards growth, reacting to the appearance of an uncertain "bullish" trend at the beginning of this week.

Resistance levels: 144.00, 145.00, 146.00, 147.00. | Support levels: 142.54, 141.50, 140.78, 139.67.

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