USDJPY looks poised to extend its losing streak to a sixth consecutive trading day. As of this writing, the currency pair is down by 0.47% from where it opened as it trades around 104.23. This follows despite earlier remarks from Japan’s Ministry of Finance about the yen’s recent strength.
Earlier today, a senior ministry official remarked that stability in the forex market is important for the government. This was widely taken as a warning that policymakers may soon take steps to ensure that stability is in place. The BOJ is widely known to intervene in the forex markets to mitigate the yen’s strength. In the past, the central bank would either directly or indirectly take actions to weaken the yen. The reason for this is because Japan is reliant on its exports for growth, a strong yen makes Japanese products less competitive on the global market.
On the daily time frame, it can be seen that USDJPY has been on a strong sell-off. Since clearing its previous lows at 106.05, the currency pair has been steadily trading lower. If there are enough sellers to sustain its recent drop, we may soon see USDJPY fall to 102.32 where it found support on March 9.
On the other hand, a strong close above yesterday’s high at 105.28 could be an indication that USDJPY may soon trade higher. Should this be the case, we could soon see the currency pair revisit its previous lows at 106.05.
USDJPY, Daily Chart
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