The USD/JPY is currently trading around the 81.00 handle. From a technical perspective, the market is consolidating its recent losses having rejected prices at the 82.00 handle on successive attempts over the last week
A further break below the 80.89-81.00 area should eventually see multi-decade lows around 80.00 placing the bears in full control .
However the ever looming backdrop of even further Japanese intervention looms large and bulls will hope the 81.00 handle
can provide firm psychological support as participants fear getting caught short the cross around these levels.
The bulls will look for the market to stabilise around the current levels before the market can stage a firmer bounce
Freshly squeezed view
BOJ has lost credibility in the markets and participants firmly believe that the BOJ will not be able to stem the rise in the Japanese Yen even
in the short-term should they step in again. If they are to step in its should be around the massve 80.00 handle.
After the Singapore rate hike, followed by Tuesday’s PBOC hike,
there is now a growing belief that the major Asian exporting economies may throw in the towel .
Expect the yen to approach the multi decade lows around the 80.00 handle.