JPY pairs watch: BOJ intervention risks amid Iran-oil uncertainty.
In recent days, JPY pairs have been driven primarily by fears - or hopes - of BOJ intervention. Despite this, the yen remains one of the most undervalued currencies in the G-7, and recent comments from Japanese officials suggest increasing pressure on JPY sellers.
From a geopolitical perspective, rising uncertainty around Iran and oil prices could push both the USD and oil higher. This would likely add further pressure on the yen. On the other hand, last week's statements from Japanese authorities were notably firm, which could limit a deeper JPY decline even in the event of a significant escalation with Iran.
With intervention risks still very much on the table, especially given upcoming holidays in Japan, further JPY appreciation against major currencies remains possible and could be quite aggressive. That said, any escalation with Iran could alter this picture, at least temporarily.
USD/JPY
Downside scenario: A move lower could find initial support around 154.80–155.20, with the next key zone for a potential washout of longs at 152–153.
Upside scenario: The 158.00–158.30 area represents the first significant resistance.
EUR/JPY
Downside scenario: In the event of a washout of longs, the 180.00–181.00 level could come into play.
Upside scenario: 184.60–185.20 may act as the first major hurdle for further upside.
GBP/JPY
Downside scenario: If the decline continues, 210.00 could serve as initial support, with further support seen around 207.00–208.00.
Upside scenario: The 213.60–214.10 zone may prove difficult to break.
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