• Investors were closely monitoring a potential intervention by Japanese authorities.
  • The yen remained close to the eight-month low of 145.07 per dollar reached last week.
  • Japanese officials are maintaining frequent communication with US Treasury Secretary Janet Yellen.

Today’s USD/JPY price analysis is slightly bearish. The yen showed strength on Tuesday as the market stayed vigilant for any signs of intervention. Investors across currency markets were closely monitoring the potential intervention by Japanese authorities to counteract the yen’s decline.

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However, the yen remained close to the eight-month low of 145.07 per dollar reached last week. This weakness led Finance Minister Shunichi Suzuki to caution against excessive yen selling.

Earlier Tuesday, Japan’s top financial diplomat, Masato Kanda, stated that officials frequently communicated with US Treasury Secretary Janet Yellen. Moreover, they communicated with other overseas authorities regarding currencies and global financial markets.

Charu Chanana from Saxo Markets noted, “This indicates the possibility of a coordinated intervention as the yen continues to linger above 144 per dollar. Such coordinated efforts tend to have a longer-lasting impact on the yen.”

Notably, Japan entered the market to purchase yen in September, marking its first intervention since 1998. This move was prompted by the Bank of Japan’s commitment to maintaining an ultra-loose policy for as long as necessary. Consequently, the yen went down to 145 per dollar. Subsequently, another intervention occurred in October when the yen plummeted to a 32-year low of 151.94.

In its biannual currency report, the United States recently eliminated Japan from its list of countries under currency monitoring. This change could potentially facilitate Tokyo’s intervention in the market.

USD/JPY key events today

The pair might experience thin trading today as the US is on holiday, and Japan will not release any key economic reports.

USD/JPY technical price analysis: Bears challenge the 30-SMA as bullish momentum weakens.

USD/JPY technical price analysis
USD/JPY 4-hour chart

USD/JPY is trading slightly below the 30-SMA for the first time in a while. This is a sign that bears might be ready to take over. This change comes after the price found strong resistance at the 145.01 key level. 

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Furthermore, it comes after the RSI recorded a bearish divergence. This divergence pointed to weaker bullish momentum. Consequently, bears took advantage of the weakness to challenge bulls at the 30-SMA. If bears break below the 144.00 key support, the price will likely fall to 143.00.

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Source: https://www.forexcrunch.com/usd-jpy-price-analysis-yen-gains-amidst-hopes-of-intervention/