Japanese yen continues to benefit from the Bank of Japan’s hawkish expectations.
The Japanese Yen (JPY) gained against the US Dollar (USD) for the third day in a row on Tuesday. Boosted by the growing likelihood of a policy move by the Bank of Japan (BoJ). Inflation data from Japan indicate. That the economy is progressing toward sustained increases in inflation. Which should allow the Bank of Japan to contemplate normalizing its ultra-loose monetary policy.
This, along with a generally weaker tone in the vicinity of the In 2024.
The services Producer Price Index (PPI) increased by 2.3% year on year in October. Up from a revised 2.0% increase in September.
Japan’s major employers are expected to follow this year’s record wage increases in 2024. Giving the Japanese central bank more leeway to finally withdraw huge monetary support.
A milder risk tone appears to help the JPY’s relative safe-haven reputation even more
The US Dollar falls closer to its monthly low as it becomes clear. That the Federal Reserve is done raising interest rates and may begin relaxing policy as early as March 2024.
For the third day in a row, a softer risk tone helps the JPY’s safe-haven character and contributes to the offered tone around the USDJPY pair.
Fed rate cut bets push the US dollar closer to its monthly low and weigh on the Japanese yen.
Investors are now anticipating the release of the BoJ Core Short-term impetus can be found in the CPI report.
The Bank of Japan’s preferred inflation index, which has been steadily climbing since a 2023 low of 2.7% in February, is forecast to remain stable at 3.4% year on year in October.
In the midst of comments by a plethora of prominent FOMC members, the Conference Board’s US Consumer Confidence Index may also add to the creation of short-term trading opportunities later in the North American session.
Japanese yen Technical Outlook
USDJPY bears could aim for the 100-day SMA support, which is located just below the 147.00 level.
A prolonged break and acceptance below the 148.00 round figure will expose the 100-day Simple Moving Average (SMA), which is currently at the 147.90-147.85 zone and, if broken decisively, will be considered as a new trigger for bearish traders and pave the way for further declines. further losses towards the monthly low, near 147.15. The USDJPY pair may then accelerate its decline towards the 146.00 level on its way to the next significant support near the 145.50 level.
On the other hand, immediate resistance is located in the 148.80 region, ahead of the 149.00 mark and the weekly top, which was reached on Monday around the 149.65 region. A prolonged rally might push the USDJPY pair past the psychological level of 150.00 and into the 150.35 resistance zone. Any near-term negative bias will be neutralized by some follow-through purchasing, allowing bulls to retake the 151.00 round-figure milestone.
