JAPANESE YEN FADES POSSIBLE INTERVENTION-LED GAINS, SLIDES BELOW 156.00 AGAINST USD

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  • The Japanese Yen rallied on Wednesday amid speculations of another intervention by authorities. 
  • The momentum, however, runs out of steam on the back of the divergent BoJ-Fed policy outlooks.
  • Traders now look to the second-tier US data for some impetus ahead of the NFP report on Friday.

The Japanese Yen (JPY) surged to over a two-week high against its American counterpart on Wednesday amid speculations that Japan's financial authorities intervened again, for a second time this week, to prop up the domestic currency. This came on the back of the post-FOMC US Dollar (USD) selling and dragged the USD/JPY pair to the 153.00 mark. The JPY, however, trimmed a part of its strong intraday gains and continued losing ground through the Asian session on Thursday, pushing the currency pair back above the 156.00 round figure. 

The Bank of Japan's (BoJ) decision to keep interest rates near zero and indication that it will continue buying government bonds in line with the guidance made in March marks a big divergence in comparison to the Federal Reserve's (Fed) hawkish signal. In fact, the US central bank said on Wednesday that it wants to gain greater confidence that inflation will continue to fall before cutting rates. This, along with the emergence of some USD buying, lends support to the USD/JPY pair amid a positive risk tone, which undermines the safe-haven JPY. 

Traders now look to the US economic docket, featuring the release of Challenger Job Cuts, the usual Weekly Initial Jobless Claims and Trade Balance data for some impetus later during the early North American session. The focus, however, will remain glued to the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday. 


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