The yen held on to pump after suspected intervention, and the focus turned to the Fed meeting

(1) On Tuesday, the yen struggled to hold pump against the dollar after rising sharply the previous day, and the yen’s big pump was facilitated by the suspected intervention of the Japanese authorities. (2) USDJPY is currently pump about 0.30% to 156.73 per dollar, but remains far from the 34-year low of 160.20 touched on Monday, when traders said yen buying intervention in Tokyo pushed the yen sharply Rebound nearly 6 yen against the dollar. Earlier on Tuesday, the Exchange Rate briefly touched 157 yen. (3) The Japanese authorities have not confirmed that they have intervened in the forex market to support the yen, but the market remains on high alert ahead of the Fed’s monetary policy review this week. Official data on whether the authorities did intervene will not be available until late May. (4) While some market participants set the trigger point for a possible intervention at 160 yen per dollar, analysts say the Japanese authorities may not have set a specific level. (5) Wei Liang Chang, currency market and credit strategist at DBS Bank, said, “Clearly, the large policy Intrerest rate gap that still exists between the Fed and the Central Bank of Japan could keep USD/JPY elevated.” For this reason, we believe that Japanese officials would like to have more flexibility in terms of where to intervene." (6) Although the yen exchange rate against the dollar recorded its largest one-day pump this year, the yen Exchange rate is still below the level before the Central Bank announced its policy last week. The yen is also on track for its biggest monthly falls since January. (7) The Central Bank of Japan has been slow to raise interest rates after its landmark decision to abandon negative intrerest rates in March, leading traders to bet that Japanese bond yields will remain low for an extended period of time. In contrast, Intrerest Rate in the U.S. remains relatively high, providing ample short for the yen to short