JPY – The yen is caught in a tug-of-war situation, with the market warning of intervention risks

The Japanese government, in its monthly report, noted that despite persistent inflation, consumer confidence in the economy is recovering. The government reiterated its cautiously optimistic view in its monthly economic assessment report, believing that Japan, the world's fourth-largest economy, is experiencing a moderate recovery, while warning of downside risks from US trade policies.

The USD/JPY pair has remained on a volatile downward trajectory this week, returning to the 155 range. Investors remain wary of potential Japanese intervention to boost the weak yen. However, given the clear break above the 155 level last week, despite recent pullbacks, the pair has remained above this level and has not held the upward trend line. The USD/JPY pair is expected to continue its upward trend. The trend line is currently at 155.40; a break below this level would likely lead to significant downward pressure on the USD/JPY pair. Based on the Fibonacci retracement level, the 38.2% retracement is at 153.50, while the 50% and 61.8% retracements are at 152.20 and 150.85 respectively. Short-term resistance levels are expected at 157.20 and 158, with the next level at 158.90, after which the 160 level will be closely watched.

Forecasted range:
Resistance 157.20 - 158.00* – 158.90 – 160.00*
Support 155.40* - 153.50 – 152.20 – 150.85

This Week's News Highlights:

26/11 Japanese Prime Minister Sanae Takaichi stated that the government is prepared to take "necessary" action on the exchange rate.

27/11 Bank of Japan policy board member Asahi Noguchi advocated for a gradual interest rate hike, stating that acting too late could have greater drawbacks.

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