Yen takes a pause after busy week

The Japanese yen has started the week with slight gains, as USD/JPY is trading at 122.75 in the North American session.

It was a rollercoaster week for the yen, which showed strong volatility throughout the week. USD/JPY posted considerable gains on Friday, as the US/Japan rate differential widened on Friday and pushed the yen briefly above the 123 line. The Japanese currency received a temporary boost after the BoJ made an unusual move and intervened to protect its yield curve and keep 10-year JGBs below 0.25%. The central bank made unlimited purchases of the 10-year bonds for four straight days last week, in a determined move to maintain its ultra-loose monetary policy. This has become more challenging for the BoJ, as many major central banks, including the Fed and the BoE are tightening policy.

The yen’s sharp movement last week was also attributable to financial year-end repatriation flows. This gave the yen a boost early in the week, but the currency weakened as the repatriation flows reversed directions, away from the yen.

The BoJ’s intervention got the job done and pushed 10-year JGBs below 0.25%, but this could prove to be of temporary relief only for the yen. BoJ Governor Kuroda remains in support of a weak yen and if the Fed decides to bring in the heavy artillery in the form of 1/2 point rate hikes, the yen will likely resume its downswing.

The week ended with US nonfarm payrolls for March, which posted a respectable gain of 431 thousand. This was lower than the consensus of 490 thousand, but investors didn’t seem to mind, as the US dollar rose. The robust labor market and strong US economy mean that 50-basis point rate hikes are real possibilities at the May, June and July Fed meetings, which is providing support for the US dollar.


USD/JPY Technical

  • USD/JPY has support at 121.21 and 120.48
  • There is resistance at 123.25 and 124.67

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.