USDJPY is now trading sideways after retreating from a six-month high in the past two days.
In the midst of a lackluster Wednesday morning in Europe. USDJPY struggles to reflect the market’s slightly pessimistic tone. And hesitates to justify statements by Bank of Japan (BoJ) Governor Kazuo Ueda. Nonetheless, the Yen pair is hovering around 139.75 as of press time. Halting a two-day losing skid from the highest levels since November 2022.
Yen sellers want confirmation from the US House and Treasury bond rates.
While expressing the sentiment. The S&P500 Futures remain undecided, with the press offering modestly around 4,220. Following a lackluster Wall Street close, while US Treasury bond rates have recently been low. Furthermore, after snapping a six-day upswing at the highest levels in ten weeks. The US Dollar Index (DXY) picks up bids to about 104.25.
Earlier in the day, BoJ Governor Kazuo Ueda emphasized the country’s inflation issues and reaffirmed the Japanese central bank’s hawkish stance. The policymaker did, however, add. “Whether inflation is caused by demand or supply has very important implications for monetary policymaking.” Similarly, Japanese numbers for April were mixed, with Industrial Production increasing year on year but declining month on month. While Large Retailer Sales increased significantly.
In other news, contradictory US data adds to concerns about an economic downturn. Richmond Fed Thomas Barkin’s comments bolstered the markets’ cautious mindset and weighed on USDJPY pricing. On the similar vein, there may be worry ahead of crucial data/events as US Republicans signal their willingness to vote down the accord to avert the debt-ceiling expiry. Furthermore, hawkish Fed bets and worries of an economic slowdown if the US defaults on its debt payment weigh on market sentiment and the USDJPY price.
The DXY, on the other hand, reflects the market’s belief that US policymakers would avoid default in any case, allowing the Federal Reserve to maintain interest rates higher for longer.
Fears of a US default and nervousness ahead of important employment indicators weigh on mood and put a floor under the US dollar.
In the near future, the House vote on the US debt ceiling agreement will be critical for immediate direction. It is also critical to keep an eye on The US JOLTS Job Openings for April are predicted to be 9.375 million compared 9.59 million in March. While the Chicago Purchasing Managers’ Index for May is expected to dip to 47.0 from 48.6.
USDJPY Technical examination
A daily close below the three-week-old prior support line. Which is now immediate resistance around 140.80, leads. USDJPY bears towards the 10-day moving average support of 139.40.
