Yen Starts a Correction of Recent Weakness

With the recent weakness on the Japanese yen, we had to expect some new comments from the BoJ and government officials. Many Forex crosses with JPY reached new, long-term highs, triggering worries about another possible intervention from Japanese policymakers and/or institutions.

Most recently, Japanese finance minister Suzuki made the following comment: “We will respond appropriately to the Forex market based on existing policy”. He said they’re monitoring moves very carefully.

Also, Japanese prime minister Kishida stated that they can’t tolerate sudden, excessive forex moves and also that they must take an appropriate response against excessive moves. So far, it’s helping to cool down recent yen weakness but nothing too spectacular, the yen is not strengthening dramatically, it’s really more of a cosmetic change.

In this piece, we’ll take a look at an interesting setup on the EURJPY, where we have a beautiful ascending triangle pattern, which a few days ago gave us a legitimate buy signal. The current support is on the 144.4 (blue) and it may be a very handsome target for the current drop. As long as we stay above that support, the sentiment is positive and buyers are definitely winning. Should the price drop below, it will give us a signal to sell, but it’s hard to imagine that happening without any intervention coming from the land of Samurais.