The pair is down 1.2% on the day near the 146.00 mark currently, with the low earlier touching 145.90. It has been more or less one-way traffic since liquidity picked up in Asia, after the opening gap lower in the pair.
USD/JPY hourly chart
The surge higher in the Japanese yen comes after BOJ governor Ueda’s remarks on a “quiet exit” from their current monetary policy settings. It’s a contrast to what they have been previously talking but is perhaps an attempt to try and prevent a further fall in the currency, which was quite assured given the stance before the weekend and with a stronger US dollar as well.
That being said, I still hold my reservations about an actual or imminent shift in stance by the BOJ as noted here. But we’ll see in time.
For now, USD/JPY is on the retreat and the near-term chart above shows that sellers are back in control. The break back below the 200-hour moving average (blue line) now sees the near-term bias turn more bearish but there is a key hurdle in the 145.00 mark next. Sellers will have to break below that in order to really get rid of buyers and their resolve.
But at least for the moment, the dollar is cooling off amid the unwinding in USD/JPY longs and also a stronger yuan today is helping the overall mood in broader markets. But with 10-year Treasury yields inching back towards 4.30%, it’s too early to say that this is where we get a turnaround in dollar sentiment after the last two weeks.