USD/JPY looks set for eventual big gains due to a mix of fundamental and technical factors, despite the worries of Japan's monetary authorities.
Japan stands ready to deal with foreign exchange matters around the clock, top currency diplomat Masato Kanda said on Tuesday, as money market data suggested the finance ministry had spent around $35 billion to prop up the sliding yen on Monday.
Despite Japanese authorities' continuing concerns over a weakening yen, there are fundamental and technical factors that point to sizeable USD/JPY gains in the days and weeks ahead to 165.
While the Bank of Japan left interest rates on hold at its recent meeting, the policy rate differential between the Federal Reserve and the BOJ remains wide and keeps USD/JPY's bias on the upside.
In April USD/JPY overcame the 152.60 Fibo, a 38.2% retrace of the major 277.65 to 75.31 (1982 to 2011) drop, which is bullish.
Fourteen-week momentum remains positive, adding to the upside potential.
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