• USD/JPY dipped on Monday as Yen potential for Japan’s FX intervention risk.
• Japan ramped up yen intervention warnings and hinted that further currency weakness could prompt a near-term rate hike, amid rising inflation concerns from the Middle East conflict..
• In the strongest warning yet on intervention, Atsushi Mimura said authorities may take “decisive” action if speculative moves in the yen persist..
• The remark marked an escalation, as Atsushi Mimura used the term “decisive” for the first time language markets see as a clear signal of potential intervention.
•Separately, Kazuo Ueda said the central bank will closely monitor yen moves, with weakness potentially fueling inflation and justifying rate hikes in the coming months.
• Immediate resistance is located at 160.21(23.6%fib), any close above will push the pair towards 161.31 (Higher BB).
• Support is seen at 158.48(March 28th low) and break below could take the pair towards 158.77 (38.2%fib)
Recommendation: Good to sell around 159.70, with stop loss of 158.50 and target price of 158.80
