USD/JPY continues its journey to the south with a dip under 100. The move is not strong so far, just a continuation of previous moves. It seems that markets are somewhat wary of the BOJ or the Japanese Ministry of Finance. Intervention could boost the pair, even if it the effect is usually short-lived.
The next level of support is 99, the post-Brexit low that didn’t last for too long.
The driver of the move is mostly the weakness of the US dollar which is felt also against other currencies. EUR/USD is flirting with 1.13 and GBP/USD with 1.30.
The poor retail sales report from Friday continues weighing on the US dollar. If anybody had thought about a potential rate hike in September, it is clearly off the cards. For the yen, the recent strength is an extension of previous moves that were triggered by a lack of sufficient stimulus from both the government and the central bank.
Earlier, the pair lost the support line of 100.70 which previously worked in both directions. It now serves as a cap to any upwards move. Further resistance awaits at 101.50. The low so far has been 99.85.
More: USD/JPY to 87 by Year End – Barclays
