USDJPY is trading in negative territory around 149.80, down 0.10% on the day.
During European session on Thursday, the USDJPY pair loses momentum at 149.80. The pair’s downside may be limited if US Treasury bond rates increase. Meanwhile, the 10-year Treasury yield in the United States has risen to 4.966%. The highest level since 2007, while the 2-year Treasury yield remains at 5.246%.. Investors are looking for new momentum from the Japanese inflation statistics. Due out on Friday. The National Consumer Price Index (CPI) ex-fresh Food in Japan is predicted to grow 2.7% year on year, up from 3.1% in the previous reading.
Building permits in the United States were more than predicted, while housing starts were lower than projected.
On Wednesday, the US housing data showed mixed results. Building Permits declined to 1.475M in September. Above the market estimate of 1.45M. While Housing Starts increased to 1.35M, falling short of the 1.38M predicted, according to US Census Bureau data. Furthermore, the Fed Beige Book update revealed “little to no change” in the US economic outlook between September and early October, and the statistics may not persuade the Federal Reserve (Fed) to abandon its existing direction.
This week’s highlights will include Fed Chair Jerome Powell’s speech and Japanese inflation statistics.
Fed policymakers maintained their intention to keep interest rates unchanged. Governor Christopher Layton Waller noted that it is too early to say if additional policy rate action is required. But that the central bank may make policy decisions based on evidence. While John Williams of the Federal Reserve Bank of New York stated that the central bank requires tight monetary policy for a while to temper inflation.
USDJPY Investors will pay more attention to Fed Chair Jerome Powell.
USDJPY Investors will pay more attention to Fed Chair Jerome Powell’s address during the American session. Fed policymakers’ hawkish views on the policy outlook may boost US Dollar demand and act as a tailwind for the USDJPY pair.
Japan’s economy is recovering across the board.
In a quarterly report, the Bank of Japan (BoJ) lifts its evaluation for six of Japan’s nine economic areas. According to the study, Japan’s economy rebounded modestly across the board. ButMany regions showed sideways movement in exports and output.
Japanese Finance Minister Shunichi Suzuki refused to comment on currency intervention earlier this week. Masato Kanda, Japan’s senior financial diplomat, stated that the Japanese Yen (JPY) remained. A safe-haven asset and benefited from the safe-haven movement generated by geopolitical tensions in the Middle East. Kanda further stated that if extreme movements in the currency market happened, the government would take action such as hiking interest rates or interfering in the market. However, a potential FX intervention by Japanese authorities might limit the USDJPY pair’s rise.
Market participants will be watching the US Jobless Claims. The Philly Fed index, and Existing Home Sales, which are coming later today. . In addition, Fed Chair Jerome Powell’s address is scheduled for later in the American session. The Japanese National Consumer Price Index for September will be widely followed on Friday.
