JPY Rallying on Wednesday

The Japanese Yen has seen a fresh wave of demand today. Part of the rally is clearly down to safe-haven inflows linked to the drop in risk assets on the back of yesterday’s stronger-than-expected US CPI reading. With markets rushing to price in a larger Fed rate hike this month, USD has soared back into demand, weighing on risk assets and creating demand for the safe-haven Yen. However, the Yen has also been propped up by reports that the BOJ has been conducting market price checks, said to be a precursor to currency intervention.

The price check comes on the back of comments by Japanese Fin Min Shunichi Suzuki this week so said (of declines in JPY) "Recent moves are rapid and one-sided, and we're very concerned. If such moves continue, we must respond without ruling out any options." When questioned specifically over [possible currency intervention, Suzuki said "We're talking about taking all available options, so it's correct to think so."

Technical Views

NZDJPY

The reversal lower in NZDJPY from the 87.55 level has seen the market breaking back under the prior 86.58 level 2022 highs. Price is now fast approaching a key area with the rising trend line from August lows and the retest of the broken triangle top both sitting just below market around the 85.61 level. A break lower here will put focus on a test of the 84.29 support next.