USD/JPY swings around 151.50 on T-yields’ recovery

The USD/JPY pair is stumbling around 151.50 as concerns over foreign exchange manipulation are still very much present. With the US dollar continuing to weaken and US rates continuing to rise, the pair is trading near the top of the recent range north of the 151.00 level. The beginning of the week saw the pair move in an erratic manner due to the US Dollar’s downward trend and the general desire for riskier investments.

US yields manage to regain some balance following many sessions of losses, while JGB 10-year yields print humble gains near 0.75%. As the pair gets closer to the 152.00 hurdle, fears of FX intervention by the BoJ and the government appear to limit the upside potential in spot.

The recent depreciation of the Japanese yen is not aligned with the underlying economic fundamentals and appears to be driven by speculative activities.

The BoJ published the minutes of its March 19 meeting, noting that the central bank is gradually moving towards a phase of tightening, as board members recognize the potential for adjusting monetary policy and acknowledging the probability of maintaining accommodative financial conditions.