Jakarta, GIC Trade – The Japanese Yen weakened past 145 per dollar, reaching its lowest level in nine months and approaching levels that prompted Japanese authorities to intervene in the currency market last September.

At that time, Japan's Ministry of Finance purchased $19.5 billion worth of yen to support the currency, which had depreciated to 145.9 on September 22. This year, the yen has been under constant pressure due to differences in interest rate policies, as other major central banks have begun aggressive tightening campaigns while the Bank of Japan (BOJ) maintains a highly accommodative monetary policy.

The yen also weakened even after the BOJ made another surprising adjustment to its yield curve control policy, effectively allowing 10-year JGB yields to rise above the upper cap of 0.5%.

Meanwhile, data showed that Japan’s economy grew more than expected in the second quarter, expanding 1.5% quarter-on-quarter and 6% annually, significantly surpassing expectations of 0.8% and 3.1%, respectively.

On the other hand, the dollar index (DXY) remained above 103 on Wednesday, hovering near a six-week high, as stronger-than-expected U.S. retail sales data supported the Federal Reserve's case for keeping interest rates higher for longer.

Additionally, Minneapolis Fed President Neel Kashkari stated on Tuesday that the U.S. central bank has made some progress in combating inflation, but interest rates may still need to rise to fulfill its mandate.

Investors are now awaiting the release of the minutes from the Fed’s latest policy meeting for further guidance on the interest rate path.

Fundamentally, Japan’s accommodative central bank monetary policy and better-than-expected U.S. economic data have lifted the U.S. dollar, putting pressure on the Japanese yen. Now, let’s take a look at the technical analysis:

Technical Analysis



The pair is attempting to rise, touching a resistance level at 145.910 and heading toward the next resistance level at 146.260. This upward trend is also supported by the FXBot template, showing the JPY value lower by 1.1 compared to the USD, which stands at 2.4. The bullish bias is further confirmed by a buy signal, indicated by a green arrow.

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