The USD/JPY currency pair is currently consolidating around the 151.60 mark, facing resistance as it struggles to surpass its November 2023 peak of 151.91. Economists at BBH delve into the pair’s outlook amidst prevailing market conditions.
The threat of foreign exchange (FX) intervention is exerting support for the Japanese yen (JPY). Japan’s Finance Minister, Shunichi Suzuki, reiterated concerns by stating that he is closely monitoring forex movements with a heightened sense of urgency.
Furthermore, Japan’s February Consumer Price Index (CPI) data indicates that the threshold for initiating an aggressive tightening cycle by the Bank of Japan (BoJ) remains elevated. Consequently, analysts believe that it’s merely a matter of time before USD/JPY establishes new cyclical highs.
In summary, while the USD/JPY pair faces resistance near its November 2023 peak, the threat of FX intervention and the cautious stance of Japan’s Finance Minister suggest ongoing support for the Japanese yen. However, economists anticipate that prevailing conditions may pave the way for USD/JPY to attain new cyclical highs in the near future.
