USD/JPY has extended today's gain to 134 pips, pushing the pair toward the 160.00 level that both Washington and Tokyo are watching most closely. Neither government has spelled out how far it wants the dollar to fall against the yen, or what it's prepared to do to hold it there.
USD/JPY extended today's gain to 134 pips, pushing the pair back toward a level that both Washington and Tokyo are watching. Neither government has spelled out how far it wants the dollar to fall against the yen, or what it's prepared to do to hold it there, according to InvestingLive.
Pair closes in on the 160.00 level
The pair is nearing 159.58, the 50% retracement of the intervention low. Officials are watching 160.00 most closely. The pair now sits just 90 pips away, with momentum helping push it higher.
For now, the tactic has been to throw money at the trade, with the US selling euros to buy yen. That move squeezed the pair lower before it bottomed out, and buyers are now stepping back in.
No clear plan from Washington, InvestingLive says
According to InvestingLive, it's skeptical that Treasury Secretary Scott Bessent has a defined strategy, which makes the trade harder to read since the US could still resort to a bigger move to unsettle the market. Bessent was mentored by George Soros and Stanley Druckenmiller, who are known for breaking the Bank of England's lock on the pound.
Bank exposure is a lingering concern
InvestingLive's concern is that Japanese banks or insurance companies are holding large obligations or losses tied to the yen's swings that could blow up. That makes USD/JPY a level worth watching closely, but not one worth chasing yet.
Source: InvestingLive
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