Japanese yen maintaining its lead versus the US dollar.
Tuesday saw follow-through buying of the Japanese Yen (JPY) for the second day in a row as statistics revealed. That Tokyo, the capital of Japan, had inflation that was still higher than the Bank of Japan’s (BoJ) 2% target. This raised hopes that the central bank will strengthen the value of the home currency. And begin to taper off its enormous stimulus program at some point this year. The US currency, or USD, as of Bets on the BoJ’s inaction in January to curb gains have the Japanese yen maintaining its lead versus the US dollar.
On Tuesday, the Japanese Yen strengthens against the US dollar for the second day in a row.
Tokyo inflation report strengthens case for a future hawkish turn in the BoJ and strengthens the value of the yen.
The Tokyo inflation report strengthens case for a future hawkish turn in the BoJ and strengthens the value of the yen.
USD is weaker and the USDJPY exchange rate declines as a result of the Fed’s unclear rate-cutting trajectory.
The USD is weaker and the USDJPY exchange rate declines. As a result of the Fed’s unclear rate-cutting trajectory.
Tuesday saw follow-through buying of the Japanese Yen (JPY) for the second day in a row as statistics revealed that Tokyo, the capital of Japan, had inflation that was still higher than the Bank of Japan’s (BoJ) 2% target. This raised hopes that the central bank will strengthen the value of the home currency. And begin to taper off its enormous stimulus program at some point this year. The US currency, or USD, as of nonetheless, is undercut by wagers. That the US Consumer Inflation Expectations decline and the Federal Reserve (Fed) begins lowering interest rates in March. Thus, throughout the Asian session, the USD/JPY pair falls below the mid-143.00s; nevertheless, the intraday decline stops ahead of the crucial 200-day Simple Moving Average (SMA).
Following a disastrous earthquake in Japan on New Year’s Day, the government implemented stimulus measures that may have already postponed the Bank of Japan’s (BoJ) plan to shift from its ultra-dovish posture. This may prevent any significant appreciation of the safe-haven Japanese yen, combined with an upbeat outlook for the Asian equities markets. Additionally, investors’ expectations for a more aggressive approach have been lowered. support close to the 200-day SMA before it reaches 143.00
Japanese Yen Technical Outlook
Technically speaking, the USDJPY pair is dragged below the 100-hour Simple Moving Average (SMA) by the intraday decline. The stage may have already been set for more losses with a following break through the 38.2% Fibonacci retracement line of the recent strong recovery from a multi-month low recorded in December. Since oscillators on hourly and daily charts are still in the negative territory, it appears that spot prices could continue to decline and test the crucial 200-day SMA, which is currently at 143.25. This could take them all the way to 143.00, or the 50% Fibo level.
Conversely, it appears that the 144.00 round number is now acting as an instantaneous obstacle ahead of the 144.25–144.30 area. A persistent power greater than the latter could start a rally for short covering. And push the USDJPY pair up to the psychological 145.00 level. If there is some follow-through purchasing. The market may turn back toward bullish traders. And spot prices may try again to break over the 146.00 level with an intermediate hurdle around the mid-145.00s.
