Oct 06, 2022
VOT Research Desk
In the midst of a tumultuous DXY, USD/JPY is attempting to give up the immediate support of 144.40.
Geopolitical issues are not given much weight by the yen bulls.
The impact of rising inflationary pressures won’t be mitigated by a fall in the US labor cost index.
USD/JPY Analysis Report
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Today last price 144.44 |
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Today Daily Change -0.14 |
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Today Daily Change % -0.10 |
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Today daily open 144.58 |
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In the Tokyo session, the USD/JPY pair is trading near the significant support level of
144.40. Given that the asset has firmly established below 144.50 and that the US dollar index (DXY) has detected a firmer selling interest, the asset is predicted to exhibit extreme volatility. The DXY has fallen well under 111.00 and may challenge Wednesday’s low at about 110.00.
S&P500 futures have sharply recovered following a lackluster New York session, suggesting that market participants’ risk appetite has improved. Risk-on impulse has been supported by the last hour’s rebound in New York and the continuance of upward momentum in Tokyo, which is also affecting the DXY.
Geopolitical issues with North Korea appear to have been ignored for some time by Japanese yen investors, but nothing has yet been resolved. Without any warning, the Japanese military has organized military exercises in reaction to ballistic missiles from North Korea. Yoon Suk-yeol, the president of South Korea, has commented that the shooting of an intermediate-range ballistic missile is intended to strike strategic installations.
The US Nonfarm Payrolls (NFP) report will be crucial moving ahead. The process of creating jobs is improving, although at a slower rate. Estimates predict that the US NFP will come in at 250k rather than the previous 315k.
The Average Hourly Earnings data, which is anticipated to decrease by 10 basis points (bps) to 5.1% on an annual basis, is the catalyst that is anticipated to have a significant influence.
Higher incomes are needed to counteract the US economy’s high levels of price pressure. A drop in the labor cost index can make families feel less optimistic.
