Japanese Yen: Focus on 160 level versus US Dollar and BoJ – Scotiabank

Scotiabank’s Analyst Team highlights that Japanese Yen gains are modest as USD/JPY hovers near the key 160 level, keeping intervention risk in focus. They note that hawkish comments from BoJ Governor Ueda and market pricing for limited tightening keep attention on the June 16 decision, while technical levels remain centred on 160 resistance and support in the 156–158 post-intervention range.

Yen sensitive to intervention risk

"The JPY is up 0.1% vs. the USD while underperforming most of the G10 currencies into Thursday’s NA session. Risk remains centered on the potential for official currency management (intervention) as USD/JPY tests the psychologically important 160 level."

"Comments from BoJ Gov. Ueda have been hawkish, and media reports suggest meaningful deliberations as policymakers look to next week’s meeting and consider an additional hike before year-end."

"Markets are currently pricing 24bps for the June 16 decision and are just below 50bps by December, offering little in terms of near-term upside. For USD/JPY, we continue to highlight the importance of the 160 level, with limited additional resistance ahead of 162."

"Near-term support is expected at 159, followed by the 156-158 range that prevailed in the immediate aftermath of the government’s interventions in late April/early May."