Yen Fell Amid U.S Inflation Data, Spark Intervention Fears

Fundamental Analysis

* • Intervention Imminent?: The Japanese Yen has reached a 34-year low against the dollar, a level not witnessed since 1990, following robust U.S. inflation data that boosted the greenback. In March, the Consumer Price Index (CPI) experienced a 0.4 percent monthly surge, exceeding the anticipated 0.3 percent increase as per a Reuters survey of economists. On an annual basis, CPI climbed by 3.5 percent, slightly surpassing the estimated 3.4 percent growth. The yen’s weakness has raised concerns about potential intervention, with Tokyo officials underscoring their readiness to take necessary actions to manage significant fluctuations in the currency’s value.

Technical Analysis

* Technical Breakout: USDJ/JPY was traded higher while currently testing the resistance level 153.30. MACD which illustrate bullish momentum with recent market structure breakout suggest the pair to potentially extend its gains.

* Resistance and Targets: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 154.90 after it breaks above the level 153.30. Conversely, a failure to breach above level would indicate a technical retracement or potential reversal, potentially leading the price back to the resistance level at 151.95.

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Potential Risks

Moving forward, market attention will be directed towards the potential actions of the Bank of Japan (BoJ) regarding intervention, following Finance Minister Suzuki’s statement that authorities are open to taking measures to address excessive fluctuations in the Yen. He emphasized a strong sense of urgency in their approach.

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Monitoring

Stay updated on US and EU data, ECB and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.