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USD/JPY falls sharply after BoJ hawkish shift and renewed 160 speculation
The pair slid to 158.20 after failing to hold gains near 160.39, with bulls needing a daily close above 158.42 to avoid bearish continuation.
USD/JPY dropped more than 1% in early US trading on Wednesday after rising to the highest level in nearly five weeks around 160.39 but failing to stay above the 160 psychological level, according to Action Forex.
The move was linked to a hawkish shift from Bank of Japan officials, who called for quick action to support the yen amid increasing inflationary risks, which has added to expectations the BoJ could raise rates as soon as this month.
At the same time, the sharp rise in the Japanese currency sparked speculation of another yen intervention after repeated attacks at the 160 threshold, Action Forex said, noting earlier intervention was reported from levels near 164.
Technically, the pair fell to 158.20, briefly bounced above support near 158.42, and the daily chart structure weakened as RSI slid below 50 and 14-day momentum turned negative, Action Forex added, saying sustained breaks below 158.42 would be needed to confirm further downside.
Latest closeUSD/JPY 158.82 ▼0.9%