Japan may intervene in the currency market again.

The yen weakens beyond 154 yen per dollar. There are indications that the Japanese government is ready to intervene, with data from the Bank of Japan indicating nearly $60 billion will be used to support the yen in this instance. Meanwhile, Janet Yellen, the US Treasury Secretary, also stated that currency intervention should not occur frequently and should be consulted thoroughly before making a decision.

The basic consumer price index in Tokyo, Japan, decreased rapidly by 1.6% year-on-year in April, lower than the anticipated 2.2%. This is attributed to government support in various sectors, which has kept the prices of goods and services from rising significantly and has helped alleviate pressure on the central bank to raise interest rates again.

The Bank of Japan has kept interest rates at around 0% after raising them for the first time since 2007. It also stated that it will continue to purchase bonds to keep returns below 1%. Overall, Japan's economy is showing positive signs as the impact of imports begins to decrease due to government support. Policy makers have revised growth forecasts for 2023 to 1.3% from 1.8% and for 2024 to 0.8% from 1.2%.

Retail sales in Japan increased by 1.2% year-on-year in March, slowing down rapidly after a 4.7% increase and lower than market expectations of 2.5%. However, consumption in Japan continues to show a positive trend and is expected to expand continuously as various pressures decrease due to government support. By industry, sales of machinery and equipment continue to increase the most, followed by food, beverages, pharmaceuticals, and cosmetics.

The yield on 10-year Japanese government bonds has decreased to approximately 0.86%, following the trend of US Treasury yields, amid growing expectations that the Federal Reserve will begin to reduce interest rates soon. Additionally, the Bank of Japan continues its policy of offering to buy bonds. Investors are now awaiting the BoJ's views this week to gather more information on the country's monetary policy, as well as government movements after the yen strengthened by over 3% last week.

Techical analysis data (5H)

Resistance: 154.79, 155.03, 155.44

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 153.73 - 154.14 but cannot break the support at 154.14, you may set a TP at approximately 155.03 and SL at around 153.49 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 154.79 - 155.03, you may set a TP at approximately 155.44 and SL at around 153.73 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 154.79 - 155.03 but cannot break the resistance at 154.79, you may set a TP at approximately 153.73 and SL at around 155.44 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 153.73 - 154.14, you may set a TP at approximately 153.49 and SL at around 155.03 or according to your acceptable risk.

Pivot point May 7, 2024 08:23 PM. GMT+7