Japanese Yen experiences volatility due to more FX intervention risks

• 
  The
  Japanese
  Yen
  edges
  lower
  as
  the
  US
  Dollar
  improves
  due
  to
  higher
  Treasury
  yields.
• 
  Japanese
  Chief
  Cabinet
  Secretary
  Yoshimasa
  Hayashi
  has
  expressed
  readiness
  to
  utilize
  all
  available
  measures
  concerning
  forex
  matters.
• 
  Fed’s
  Goolsbee
  stated
  that
  the
  US
  economy
  appears
  to
  be
  on
  track
  to
  achieve
  2%
  inflation.

The
Japanese
Yen
(JPY)
trims
its
gains
as
the
US
Dollar
(USD)
strengthens,
buoyed
by
improved
Treasury
yields.
However,
the
JPY’s
volatility
is
anticipated
to
persist
amid
speculation
of
intervention
by
Japanese
authorities
following
weaker-than-anticipated
US
Consumer
Price
Index
(CPI)
figures.

Japanese
Chief
Cabinet
Secretary
Yoshimasa
Hayashi
stated
his
readiness
to
employ
all
available
measures
regarding

forex.
Hayashi
noted
that
the
Bank
of
Japan
(BoJ)
would
determine
the
specifics
of
monetary
policy.
He
expects
that
the
BoJ
will
implement
appropriate
measures
to
sustainably
and
steadily
achieve
the
2%
price
target,
reported
by
Reuters
on
Friday.

The
Bank
of
Japan
(BoJ)
could
raise
interest
rates
at
its
upcoming
July
meeting.
This
expectation
bolstered
the
JPY,
contributing
to
a
decline
in
the

USD/JPY
pair.

Daily
Digest
Market
Movers:
Japanese
Yen
experiences
fluctuations
amid
intervention
threats

• On
  Friday,
  Japanese
  Finance
  Minister
  Shunichi
  Suzuki
  emphasized
  that
  rapid
  foreign
  exchange
  (FX)
  movements
  are
  undesirable.
  Suzuki
  refrained
  from
  commenting
  on
  FX
  intervention
  and
  declined
  to
  address
  media
  reports
  regarding
  Japan’s
  FX
  rate
  checks,
  as
  reported
  by
  Reuters.
• Federal
  Reserve
  Bank
  of
  Chicago
  President
  Austan
  Goolsbee
  said
  on
  Thursday
  that
  the
  US
  economy
  appears
  to
  be
  on
  track
  to
  achieve
  2%
  inflation.
  Goolsbee
  stated
  “My
  view
  is,
  this
  is
  what
  the
  path
  to
  2%
  looks
  like,”
  according
  to
  Reuters.
• The
  US
  Consumer
  Price
  Index
  (CPI)
  declined
  by
  0.1%
  month-over-month
  in
  June,
  marking
  its
  lowest
  level
  in
  over
  three
  years.
  The
  headline
  CPI
  increased
  by
  3.0%
  MoM
  in
  June,
  down
  from
  a
  3.3%
  rise
  in
  May
  and
  below
  the
  market
  consensus
  of
  3.1%.
• The
  core
  CPI,
  which
  excludes
  volatile
  food
  and
  energy
  prices,
  rose
  by
  3.3%
  year-over-year
  in
  June,
  compared
  to
  May’s
  increase
  of
  3.4%
  and
  the
  same
  expectation.
  Meanwhile,
  the
  core
  CPI
  increased
  by
  0.1%
  month-over-month,
  against
  the
  expected
  and
  prior
  reading
  of
  0.2%.
• Peter
  Boockvar,
  chief
  financial
  officer
  at
  US-based
  Bleakley
  Financial
  Group,
  said
  that
  the
  Yen’s
  weakness
  will
  trigger
  the
  BoJ
  to
  “react
  sooner
  rather
  than
  later,”
  per
  Reuters.
• Reuters
  reported
  on
  Wednesday,
  citing
  unnamed
  sources,
  the
  Bank
  of
  Japan
  will
  likely
  trim
  this
  year’s
  economic
  growth
  forecast
  and
  project
  inflation
  will
  stay
  around
  its
  2%
  target
  in
  coming
  years
  at
  its
  meeting
  this
  month.
• Federal
  Reserve
  Chairman
  Jerome
  Powell
  highlighted
  the
  urgent
  need
  to
  monitor
  the
  deteriorating
  labor
  market
  on
  Wednesday.
  Additionally,
  Powell
  expressed
  confidence
  in
  the
  downward
  trend
  of
  inflation,
  following
  his
  remarks
  on
  Tuesday
  that
  emphasized
  the
  necessity
  of
  further
  data
  to
  strengthen
  confidence
  in
  the
  inflation
  outlook.
• According
  to
  a
  Bloomberg
  report
  on
  Tuesday,
  the
  Bank
  of
  Japan
  is
  conducting
  three
  in-person
  meetings
  with
  banks,
  securities
  firms,
  and
  financial
  institutions
  over
  the
  next
  few
  days.
  These
  meetings
  aim
  to
  assess
  a
  feasible
  pace
  for
  scaling
  back
  its
  purchases
  of
  Japanese
  Government
  Bonds.

Technical
Analysis:
USD/JPY
rebounds
toward
159.50

USD/JPY
trades
around
159.30
on
Friday.
The
daily
chart
analysis
shows
a
weakening
bullish
bias
as
it
breached
the
lower
boundary
of
an
ascending
channel
pattern.
Additionally,
the
14-day
Relative
Strength
Index
(RSI)
was
slightly
below
the
50
level,
indicating
a
decline
in
the
momentum
of
the
pair’s
price.

The
USD/JPY
pair
may
find
initial
support
near
the
psychological
level
of
109.00.
A
break
below
this
level
could
reinforce
bearish
sentiment,
potentially
prompting
a
revisit
to
June’s
low
near
104.55.

On
the
upside,
immediate
resistance
is
seen
around
the
21-day
Exponential
Moving
Average
(EMA)
at
109.82,
followed
by
the
lower
boundary
of
the
ascending
channel
near
109.95.
A
return
to
within
the
ascending
channel
would
likely
improve
sentiment
for
the
USD/JPY
pair,
potentially
targeting
the
upper
boundary
of
the
channel
around
the
113.20
level.

USD/JPY:
Daily
Chart