EUR/JPY accelerates its uptrend and reaches 146.50 area
17.10.2022, 18:29

EUR/JPY accelerates its uptrend and reaches 146.50 area

  • The euro rallies to fresh seven-year highs at 146.50.
  • The yen, unable to capitalize on USD weakness, continues on free fall.
  • The market is on the watch for BoJ intervention.

The euro opened the week on a strong note, accelerating its rally beyond 145.60, to hit 146.50 so far, its highest level since January 2015.

The Japanese yen continues on free-fall

The yen has been the only major currency unable to benefit from the US dollar weakness amid the improvement in risk appetite and has extended its decline, with the USD/JPY reaching fresh 32-year lows.

Investors remain on the watch for the possibility of an intervention by the Bank of Japan to strengthen the JPY. The yen has actually exceeded the level that triggered an intervention by the BoJ last month, and the Japanese Government has reiterated its commitment to a “firm response” to avoid rapid yen declines.

The yen is under pressure on the back of the monetary policy divergence between the BoJ and the rest of the major world central banks, and especially the Federal Reserve.

The Fed is widely expected to increase rates by 0.75% for the fourth consecutive time in November while the Japanese bank maintains an ultra-expansive policy that is crushing demand on the Japanese currency.

Technical levels to watch

 

 

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