USD/JPY meanders around 149.80s as the yen continues to weaken despite intervention looming

• USD/JPY oscillates around 149.80 as US Treasury yields rise, underpinning the US Dollar.
• The US housing market keeps deteriorating while the Federal Reserve pushes the pedal to the metal, ready to lift rates in November.
• Bank of Japan (BoJ) policymakers expressed that volatility surrounding the yen must reflect fundamentals,

The Japanese yen prolonged its agony against the US Dollar, printing a fresh 32-year low, as the USD/JPY reached a YTD high of 149.88 as market players tested the prospects of another intervention by the Bank of Japan (BoJ). As the Asian Pacific session begins, the USD/JPY is trading at 149.85, almost flat.

The Japanese yen weakened as US Treasury yields soared

Wall Street finished Wednesday’s session trading in the red. The Eurozone (EU), the UK, and Canada reported September’s inflation which remained stubbornly high, though the UK and Canada figures exceeded and were nearby estimates, while the EU’s inflation ticked lower vs. previous and foreseen figures, but by a minuscule margin. Given that backdrop, worldwide bond yields skyrocketed as expectations for further central bank tightening increased. Hence, the US 10-year T-bond yield rose by 12 bps, up at 4.138%, a tailwind for the USD/JPY.

In the meantime, US housing data revealed during the New York session still flashes the effect of the US Federal Reserve’s interest-rate hikes. Housing Starts for September were worse-than-expected, tumbling by 8.1% MoM vs. August’s 13.7% gain, as mortgage rates in the US keep climbing, reaching a 20-year high at 6.94%.

Aside from this, Japanese authorities continued their verbal interventions, led by the BoJ Governor Haruhiko Kuroda, who said that it is extremely important for the FX market moves to reflect fundamentals. Echoing his comments was his college, BoJ’s Adachi, who added that using monetary policy to respond to FX moves would increase uncertainty over the BoJ’s guidance.

On Thursday, the Japanese economic calendar will feature the Trade Balance, alongside Exports and Imports and Foreign investments. Meanwhile, the US economic docket will feature Initial Jobless Claims, Existing Home Sales, and the Philadelphia Fed Business Index.

USD/JPY Key Technical Levels