The Japanese yen is plunging toward its weakest level of 2024 against the US dollar, with USD/JPY now testing the critical 162.00 threshold. Societe Generale strategist Kenneth Broux reports the currency pair has smashed through recent consolidation levels and is challenging the year’s previous peak established earlier in 2024.
Despite the yen’s weakness, strong May retail sales data out of Japan are reinforcing market expectations that the Bank of Japan will proceed with additional monetary tightening measures. This creates a complex dynamic for currency traders as robust economic indicators suggest potential policy support for the yen even as it faces immediate downward pressure.
The breakdown affects Japanese exporters who benefit from yen weakness, importers facing higher costs, and carry trade positions that have profited from the interest rate differential between Japan and the United States.
FXnCO Insight
Traders should watch 162.00 closely as a break above this level could trigger stop-losses and accelerate yen selling, while strong Japanese data may prompt BOJ intervention threats.
Source: FXStreet