FxWirePro: USD/JPY advances as intervention fears fail to lift Yen

•  USD/JPY strengthened  on Tuesday as  yen remained under pressure as the wide interest rate differential between the United States and Japan continued to favor the dollar.

• The yen slumped to levels not seen since 1986 on Tuesday, stoking worries that direct intervention from Tokyo was around the corner.

• Japanese Finance Minister Satsuki Katayama reiterated the authorities stood ready to respond appropriately at any time, refraining from stronger rhetoric.

• The yen has shrugged off bouts of intervention worth 11.7 trillion yen ($72.25 billion) and interest rate hikes from the Bank of Japan in the past few months as the Iran war stoked inflationary worries and derailed the global rates outlook.

• The Japanese currency was set for a 2% drop in the second quarter, its fourth straight quarter of decline, its longest such streak since 2022
 
•  Immediate resistance is located at 163.38(23.6%fib), any close above will push the pair towards 162.80(Higher BB).

•  Support is seen at 161.70(June 30th low) and break below could take the pair towards 160.94(SMA 20).

Recommendation: Good to buy around 162.10, with stop loss of 162.10 and target price of 162.90