USD/JPY prints fresh weekly low near 144.00 as intervention fears loom, US Dollar accelerates

• USD/JPY has printed a fresh weekly low around 144.00 as fears of BoJ’s intervention have elevated.
• Contrary to the sell-off in the USD/JPY pair, the US Dollar Index has printed a fresh four-day high at 103.40.
• FOMC minutes conveyed that policymakers were mixed between a small interest rate hike and a skip.

The USD/JPY pair has slipped sharply to near 144.00 in the Tokyo session. The asset has registered a fresh weekly low at 143.92 as fears of intervention in the currency market by the Bank of Japan (BoJ) have soared.

S&P500 futures have posted significant losses in the Asian session. US equities also faced selling pressure on Wednesday after a holiday mood amid uncertainty propelled ahead of the quarterly result season. Investors are not anticipating overall decent improvement as monetary policy remained extremely tight by the Federal Reserve (Fed) and commercial banks maintained tight credit conditions to protect asset quality in a turbulent environment.

Contrary to the sell-off in the USD/JPY pair, the US Dollar Index has printed a fresh four-day high at 103.40 as investors are confident that an interest rate hike by 25 basis points (bps) from the Fed cannot be ruled out.

Federal Open Market Committee (FOMC) minutes released on Wednesday conveyed that policymakers were mixed between a small interest rate hike and a skip. Fed policymakers are uncertain about the economic outlook considering that inflation is still elevated and will take time to reach the 2% target.

Meanwhile, fears of intervention in the FX domain by the BoJ or Japanese diplomats have elevated as the Japanese Yen has depreciated to 145.00 against the US Dollar. Earlier, a poll from Reuters showed that Japanese diplomats could intervene in the FX domain if the Japanese Yen depreciates to 145.00 against the US Dollar.

In addition to a Reuters poll, Japan's top financial diplomat Masato Kanda said this week that authorities were in close contact with US Treasury Secretary Janet Yellen and other overseas officials "almost every day" on currencies and broader financial markets, as reported by Reuters.