USD/JPY is erasing its intervention-driven losses and closing in on the 160.50 resistance zone. Traders are now waiting on Fed Chair Warsh's speech at the Jackson Hole Symposium to see whether he pushes back against the recent easing in financial conditions.
USD/JPY is approaching the key 160.50 resistance zone after clawing back the losses triggered by recent intervention. The pair's next move now hinges on what Fed Chair Warsh says today.
Dollar traders position ahead of Warsh
The US dollar has traded in a mixed range over the past couple of days, with traders likely taking profits and hedging ahead of Warsh's Jackson Hole address. He is not expected to offer forward guidance, but markets will watch whether he leans against the easing in financial conditions that followed the Treasury's buyback announcement and Bessent's "verbal" intervention to suppress long-term yields.
If Warsh does not push back, the dollar likely faces renewed pressure from further easing in financial conditions and a dovish repricing of near-term rate expectations. If he does push back, markets may retighten financial conditions, giving the greenback a boost.
Yen stays pressured as BoJ move is already priced in
The yen remains under pressure, with no shift on the fundamental side. A BoJ rate hike in September is largely priced in, so that expectation is unlikely to move the pair on its own. The trend probably will not change without a dovish repricing in Fed interest rate expectations or a faster BoJ tightening pace.
Technical picture points to 160.50 as the next test
On the daily chart, USD/JPY has been slowly recovering ground since the intervention, with the 160.50 resistance zone as the first major target. A move there could draw sellers positioning for a drop back to the 155.00 handle, while a break higher would open the door to new cycle highs. On the 4-hour chart, a minor support zone near 158.50 could attract buyers on a pullback, whereas a break below it would favor sellers targeting the 155.00 level next. The 1-hour chart shows an upward trendline still defining the pair's bullish momentum.
All eyes now turn to Warsh's remarks at Jackson Hole, which are typically released moments before or alongside his speech.
Source: Investinglive
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