Washington's intervention in the yen trade has stalled, with USD/JPY stuck at 157.70 days after the US Treasury moved to buy Japanese yen. Traders are unsure what the US does next, and a Bank of Japan rate hike looks unlikely to break the deadlock.
The US Treasury's yen intervention has hit a wall, and traders don't know where Washington goes from here. Treasury Secretary Scott Bessent appears to have leaked the intervention last week, then followed through by buying yen late in the day. The report questions whether Washington actually has a plan to push USD/JPY meaningfully lower, or whether it is improvising.
Even so, USD/JPY remains stuck at 157.70, with no clear plan yet to push the pair meaningfully lower. The market isn't sure what happens next, either.
Yet talk of a Bank of Japan rate hike hasn't broken the deadlock. Last week's vote wasn't particularly close, and an emergency hike now would cost the BOJ its credibility.
But if the US walks away, fresh USD/JPY buying could follow, and the pair would be right back where it started. The commentary casts the yen trade as another market operating under this administration's watch, alongside oil and Intel shares.
Source: InvestingLive
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