Yen slips as powerful 7.2 quake off northern Japan prompts tsunami warnings
A strong offshore earthquake struck near Aomori in northern Japan, triggering tsunami warnings of up to 3 meters and knocking the yen lower as traders weighed immediate disruption risks against safe-haven flows.
What happened
A 7.2 magnitude earthquake was reported off the coast of Aomori Prefecture in northern Japan, prompting tsunami warnings and advisories along parts of the Tohoku coastline. Early checks indicated no abnormalities at Tohoku Electric’s nuclear facility in Aomori, easing some systemic risk concerns even as coastal communities were urged to remain vigilant.
Market reaction: Yen weakens, USD/JPY clears key technicals
The initial market impulse pushed the yen lower. USD/JPY rose through its 200-hour moving average near 155.64 and topped a nearby resistance band around 155.75, with an intraday high close to 155.91. Holding above the 155.64–155.75 zone keeps the near-term bias constructively bullish for USD/JPY as event risk is repriced.
Typically a haven during global stress, the yen can weaken when shocks originate domestically and threaten growth, infrastructure, or supply chains—especially if investors anticipate policy support or easier financial conditions to cushion the blow. In early dealing, traders flagged thin liquidity and wider bid–offer spreads as volatility picked up across yen crosses.
Broader risk considerations
Beyond FX, investors will watch for disruptions to ports, rail, power infrastructure, and insurance exposures along the Tohoku coast. Any prolonged shutdowns could weigh on cyclicals while boosting construction and materials on reconstruction expectations. Japan government bond demand often firms on disaster headlines, though the policy path of the Bank of Japan remains the bigger anchor for rates.
What traders are watching next
- Updates to tsunami guidance and aftershock activity from authorities.
- Infrastructure status, especially power and transport, and any impact on industrial supply chains.
- Official communication from the BOJ and Ministry of Finance if FX stability or funding conditions become a concern.
- Options markets for signs of elevated yen volatility and positioning shifts in yen crosses.
At a glance
- Magnitude 7.2 quake struck offshore near Aomori, northern Japan.
- Tsunami warnings/advisories issued; waves up to 3 m possible.
- No abnormalities reported at Tohoku Electric’s Aomori nuclear facility.
- Yen weakened; USD/JPY cleared its 200-hour MA (~155.64) and tested ~155.91.
- Near-term USD/JPY bias stays firmer while above 155.64–155.75.
- Focus on infrastructure, insurers, ports, and potential policy signals.
Technical snapshot: USD/JPY
- Immediate support: 155.64–155.75 (former resistance/200-hour MA zone).
- First resistance: Psychological 156.00, then recent intraday highs if momentum persists.
- Bias: Constructive while holding above support; dips may find buyers on event-driven volatility.
FAQ
Q: Where did the earthquake occur?
A: Offshore near Aomori Prefecture in northern Japan.
Q: How high are the expected tsunami waves?
A: Authorities warned of waves potentially reaching up to 3 meters in some areas.
Q: Is there any nuclear safety concern?
A: Early checks indicated no abnormalities at Tohoku Electric’s nuclear facility in Aomori.
Q: How did the yen react?
A: The yen weakened on the headlines. USD/JPY broke above its 200-hour moving average around 155.64, reaching roughly 155.91 at the session high.
Q: What levels matter now for USD/JPY?
A: The 155.64–155.75 zone is important near-term support; the 156.00 handle is initial resistance.
Q: What could Japanese authorities do next?
A: Expect continued tsunami and aftershock updates. The BOJ and Ministry of Finance may monitor market functioning and FX stability; any material disruption could prompt liquidity support measures.
This developing story will be updated as more information becomes available by BPayNews.
