USD/JPY faces pressure around 144.00 as investors hope BoJ’s stealth intervention

• USD/JPY has sensed selling pressure around 144.00, however, the upside seems favored.
• Market sentiment has turned sour as investors are getting cautious ahead of the second quarter result season.
• A poll from Reuters showed that BoJ officials could intervene if USD/JPY climbs to 145.00.

The USD/JPY pair has faced selling pressure near the crucial resistance of 144.00 in the late London session. The asset has dropped marginally, however, the upside bias is still solid as the US Dollar Index (DXY) is well-supported around 102.50 ahead of United States Durable Goods Orders data.

S&P500 futures have surrendered the majority of gains as the risk appetite of the market participants have trimmed dramatically. Market sentiment has turned sour as investors are getting cautious ahead of the second quarter result season. The investing community is not confident about the corporate profits as technology stocks are expected to deliver weak guidance due to higher interest rates by the Federal Reserve (Fed) while Net Interest Income (NII) for banks could remain under pressure due to tight credit conditions.

The US Dollar Index (DXY) is consistently showing a non-directional performance ahead of the US Durable Goods Orders data. As per the preliminary report, the economic data is seen contracting by 1.0% vs. an expansion of 1.1%. Durable Goods Orders excluding defense are seen as stagnant against a contraction of 0.7%. The yields offered on 10-year US Treasury bonds have dropped sharply to near 3.72%.

Meanwhile, the Japanese Yen is broadly facing pressure as the Bank of Japan (BoJ) will continue the ultra-dovish policy. Sheer depreciation in the Japanese Yen has propelled hopes of a stealth intervention by the BoJ. A poll from Reuters showed that BoJ officials could intervene if USD/JPY climbs to 145.00. Also, Japanese Finance Minister Shunichi Suzuki said that he “will respond appropriately if FX moves become excessive.”