USD/JPY Rises Above The 145 Level, Threatening A Potential Break To 1998 Levels

USD/JPY

A bearish Wall Street trading session has placed the Asia-Pacific region on its toes.

A stronger US Dollar, driven by the hawkish stance of Fed speakers and perhaps some risk aversion before tomorrow’s US non-farm payrolls report, is dampening market sentiment.

Asia-Pacific stocks look ready to open mostly lower after a selloff on Wall Street, where the benchmark S&P 500 closed 1.02% lower. Bad news from AMD followed shortly after the closing bell, with the chipmaker warning that third-quarter numbers are tracking far below initial guidance.

Cannabis stocks soared after the release of a report stating that US President Joe Biden is set to pardon all low-level possession convictions for marijuana on a federal level. The largest cannabis ETF, Pure US Cannabis ETF, surged 34% higher, its best single-day gain on record, although most of those stocks remained lower from the start of the year.

USD/JPY rises above the 145 level, threatening to scale to levels not seen since. It will test the Ministry of Finance’s resolve if prices continue to rise. Traders have reduced their bets, and options positioning via currency futures show JPY traders continue favoring puts over calls.

Considering the USD’s fundamental support from various channels, which might largely continue, Japan might have to end the fight and expense a sizable portion of its balance sheet.

Japan will release several economic data points for August to close out the week.

The data includes household spending and average cash earnings.

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