Japanese Yen remains confined in a range near multi-decade low against USD

• The Japanese Yen remains depressed near a multi-decade low amid the BoJ’s dovish outlook.
• The divergent Fed-BoJ expectations support prospects for a further JPY depreciation move.
• Intervention fears hold back the JPY bears from placing fresh bets and cap the USD/JPY pair.

The Japanese Yen (JPY) oscillates in a narrow trading band near a multi-decade low during the Asian session on Tuesday and for now, seems to have stalled a two-day-old weakening trend against its American counterpart. Investors remain on alert in the wake of the possibility of an intervention by Japanese authorities to support the domestic currency, which, in turn, holds back the JPY bears from placing fresh bets. That said, the Bank of Japan's (BoJ) dovish outlook, saying that monetary policy will remain easy for some time, along with a generally positive tone around the equity markets, continues to undermine the safe-haven JPY. 

The US Dollar (USD), on the other hand, manages to hold its neck above a nearly two-week trough touched last Thursday and continues to draw support from expectations that the Federal Reserve (Fed) may delay cutting interest rates. This suggests that the gap between US and Japanese interest rates will stay wide, which, in turn, is seen as another factor acting as a tailwind for the USD/JPY pair. The USD bulls, however, prefer to wait for more cues about the Fed's rate-cut path. Hence, the focus will remain glued to the release of the US consumer inflation figures for March and the FOMC meeting minutes on Wednesday.

Daily Digest Market Movers: Japanese Yen bulls fail to gain any respite despite verbal intervention by authorities

• The recent jawboning from Japanese authorities, showing readiness to intervene in the markets to address any excessive falls in the domestic currency, helps limit the downside for the Japanese Yen.
• Japan's Prime Minister Fumio Kishida said on Friday that excessive volatility in currency rates is undesirable and warned that authorities will use all available means to deal with excessive JPY falls.
• Japan Finance Minister Suzuki reiterated on Monday that FX needs to move stably reflecting fundamentals and he won't rule out any option, and will deal appropriately with FX moves.
• The Bank of Japan's (BoJ) cautious approach, indicating that accommodative financial conditions will be maintained for an extended period, fails to assist the JPY in attracting any meaningful buying.
• Moreover, data released on Monday showed that inflation-adjusted real wages for Japanese workers fell in February for the 23rd consecutive month and further contributed to keeping a lid on the JPY. 
• The optimism over talks on a potential Israel-Hamas ceasefire remains limited in the wake of Israeli Prime Minister Benjamin Netanyahu's threat of a ground invasion in the southern Gaza city of Rafah.
• The upbeat US jobs report released on Friday, along with the recent hawkish remarks by Federal Reserve officials, keeps the US Treasury bond yields elevated and acts as a tailwind for the US Dollar.
• The US Treasury bond yields climbed to their highest levels since late November as investors continue scaling back their bets for how deeply the Fed will be able to cut interest rates this year.
• Chicago Fed President Austan Goolsbee on Monday acknowledged that the US economy remains strong, but wondered how long the central bank can be restrictive without it damaging the economy.
• Minneapolis Fed President Neel Kashkari said that the central bank cannot stop short on the inflation fight and that the labor market is not red hot like it was 12 months ago but its still tight.

Technical Analysis: USD/JPY awaits a move beyond the 152.00 mark before the next leg of an appreciating move

From a technical perspective, the range-bound price action witnessed over the past three weeks or so might still be categorized as a bullish consolidation phase against the backdrop of the recent rally from the March swing low. Moreover, oscillators on the daily chart are holding in the positive territory and are still away from being in the overbought zone, suggesting that the path of least resistance for the USD/JPY pair is to the upside. That said, it will still be prudent to wait for a sustained move and acceptance above the 152.00 mark before positioning for any further gains. 

In the meantime, any corrective pullback is more likely to find some support and be bought into near the 151.30 horizontal zone. This should help limit the downside for the USD/JPY pair near the 151.00 mark. A convincing break below the latter, however, might prompt some technical selling and expose Friday's swing low, around the 150.30 region. This is followed by the 150.00 psychological mark, which if broken decisively will shift the near-term bias in favor of bearish traders. Spot prices might then accelerate the fall to the 149.35-149.30 region en route to the 149.00 mark.