USD/JPY SLIDES BELOW MID-148.00S, DOWNSIDE POTENTIAL SEEMS LIMITED
- USD/JPY retreats after touching its highest level since August 16 amid intervention fears.
- Reduced bets for more BoJ rate hikes and an oversized Fed rate cut should lend support.
- Any meaningful corrective slide could be seen as a buying opportunity and remain limited.
The USD/JPY pair struggles to capitalize on a modest Asian session uptick or find acceptance above the 149.00 mark and retreats a few pips from its highest level since August 16 touched this Monday. Spot prices slide below mid-148.00s, or a fresh daily low in the last hour and for now, seem to have snapped a three-day winning streak, though the fundamental backdrop warrants caution for bearish traders.
Japan's Finance Ministry's Vice Finance Minister for International Affairs Atsushi Mimura said that the government will monitor FX moves including speculative movement, fueling speculations about a possible intervention. This, in turn, offers some support to the Japanese Yen (JPY) and attracts some sellers around the USD/JPY pair. That said, diminishing odds for another interest rate hike by the Bank of Japan (BoJ) in 2024 and a more aggressive policy easing by the Federal Reserve (Fed) should continue to act as a tailwind for the currency pair.
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