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Forex - USD/JPY slips as BoJ intervention appears unlikely

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Forex Pros - The U.S. dollar pulled back from a five-day high against the yen on Wednesday, re-approaching the psychologically important 80.00 level as Japan appeared unlikely to intervene to stem the yen's gains.

USD/JPY eased off 81.08, the pair's highest since May 4, to hit 80.71 during early European trade, slipping 0.18%.

The pair was likely to find support at 80.04, the low of My 6 and resistance at 81.68, the high of May 2.

The 80.00 level is considered important because many of Japan's top employers, including auto and electronics exporters, make business planning assumptions that the dollar won't fall below that level.

On March 18, the Japanese government, backed by central banks from the Group of Seven, intervened in currency markets to stem the yen's steep gains in the wake of Japan's earthquake and tsunami.

However, on Friday Japan's Finance Minister Yoshihiko Noda said "market conditions are different from those in March." Meanwhile, Economy Minister Koru Yosano described the situation as "not of the yen's unequaled strength but the dollar's weakness."

The yen was also higher against the euro, with EUR/JPY slipping 0.34% to hit 116.13.

Later in the day, the U.S. was to publish official data on its trade balance. In addition, the country was to publish government data on crude oil inventories and the federal budget balance.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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