• 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
