USD/JPY Soars to 34-Year High on Surging US Inflation and Yields

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USD/JPY surged to a near 34-year peak following a hotter-than-expected US inflation report that sharply boosted US Treasury yields. The pair breached the psychologically significant 152.00 level, often cited as a potential intervention trigger, though Japanese authorities have yet to take action. Currently trading near 152.70, the pair gains 0.90%.

US Inflation Data Drives Yield Spike, Fuels Fed Expectations

Bureau of Labor Statistics (BLS) data revealed accelerating US inflation. Headline Consumer Price Index (CPI) rose 0.4% MoM and 3.5% YoY, exceeding forecasts. Core CPI, excluding volatile food and energy prices, also beat expectations while remaining unchanged from February’s reading. The report sparked a strong reaction, sending US Treasury yields soaring, especially at the short end of the curve with the 2-year note climbing 20 basis points. The US Dollar Index (DXY) hit a year-to-date high near 105.10 before pulling back slightly.

Fed Outlook: Market Expects Aggressive Policy Stance

Post-inflation data, Fed futures now project only two rate cuts by December 2024, with interest rates expected to peak near 4.97%.

Intervention Threats Ignored, USD/JPY Hits Multi-Year High

USD/JPY surged to a multi-year high of 152.73, its highest level since June 1990, defying intervention threats from Japanese authorities. Finance Minister Shunichi Suzuki expressed a sense of urgency and willingness to take action against excessive currency movements.

Technical Outlook: Eyes Further Upside Potential

USD/JPY is trading at levels unseen since the 1990s. With the pair decisively above 152.00, the next key resistance area lies around June 1990’s high of 155.78, followed by the overall 1990s high near 160.32. Initial support exists at the psychological 152.00 level, then the Tenkan-Sen at 151.77, and the April 5th low of 150.81.


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