Similarities from the last time Japanese Authorities intervened in the FX market have appeared after a massive USD/JPY reversal. Risk sentiment continues to favour AUD and high importance US data returns.
In a recent financial market update, volatility in the USD/JPY was spotlighted, hinting at potential Japanese FX intervention to counter the yen's undesirable weakening against the dollar, which soared past 160, a significant move indicating potential intervention. Inflation trends and interest rate differentials between the U.S. and Japan have been pivotal in the lead up to the 160 mark in USD/JPY as market participants favoured the carry trade. The update also highlighted global market sentiment, movements in other currencies like the Australian dollar and the British pound, and noted key economic events ahead—such as the FOMC rate decision and Non-Farm Payrolls. Additionally, the market update touched on gold's reaction to geopolitical tensions and the S&P 500's performance, pointing to an optimistic outlook driven by tech earnings.
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