The pair visits a 37-year high – OCBC

USD/JPY rises to a 37-year high of 160.87 overnight. The next resistance lies at 161.20, note OCBC analysts Francis Cheung and Christopher Wong.

Markets enter Al Ain

“USDJPY rose to a 37-year high of 160.87 overnight. Rising USD yields were the latest catalyst to push USD/JPY higher, in line with our warning that USDJPY should… It will continue to face a challenge above 160. We also expect the rise after the 2024 high to test the resolve of the Japanese authorities.

However, intervention is at best an option to slow the pace of currency depreciation rather than a tool to reverse the trend. For USDJPY to turn lower, it would require the US dollar to turn/lower the Fed or lower it Bank of Japan To urgently indicate the intention to normalize. None of the above appears to be happening, so the path of least resistance for USD/JPY may still be to the upside.”

“The pair was last at 160.41. Bullish momentum on the daily chart is intact although the RSI is showing signs of turning lower from near overbought conditions. Next resistance is at 161.20 (138.2% Fibonacci forecast from 2023 low to 2023), 164 Support level is at 157.70 (21 DMA), 156.60 (50 DMA).”