JPY is still being offered strongly near 130.00. The BoJ is anticipated to adopt a more bullish stance, which strengthens the JPY and lowers the pair.

JPY Outlook:  Further USD purchases could provide support and help halt further losses.

The USDJPY duo drifts downward for a third straight day on Friday. Extending this week’s rejection slide from the 133.00 level. During the first half of the European session, spot prices plunge to their lowest level since Feb 10. Bears are now attempting to push the negative trend even lower, under the psychological level of 130.00.

JPY makes inroads from domestic CPI data

In response to domestic data showing that a key measure of Japan’s consumer prices increased at the highest pace since 1982 in Feb. The Yen strengthens across the board. In reality, Japan’s core-core CPI—which contains alcoholic beverages but excludes energy and food prices—accelerated to 3.5% in Feb. Marking the country’s fastest year-over-year growth in 41 years.

Investors look out for further cues

A further drop in US Treasury bond yields, driven by the Federal Reserve’s indication that it may soon halt the rate-hiking cycle. Response to the recent chaos in the banking industry is another cue for bearish speculators. In reality, the yield on both the rate-sensitive 2-year Treasury note and the benchmark 10-year US government bond. Still hovering around a six-month low reached early this week.

This causes the US-Japan rate differential to further narrow. Which is considered to be another reason that encourages flows towards the JPY. adds to the tone of strong offers circling the USDJPY duo. This increases the likelihood that the (BoJ) will alter its bond yield control policy in the near future. Which benefits the local currency and keeps the USDJPY pair under duress.

The US dollar performance

The US Dollar (USD), on the other hand, is building on the overnight good recovery from a 7-week low and getting some follow-through support. This is preventing bearish speculators from making new wagers on the US dollar versus the paid duo. Which is thereby limiting the downside, if only briefly.

However, spot prices are still on pace to post weekly losses for the fourth time in a row. And the fundamental environment outlined above raises the possibility of the current rejection slide. The 200-day Simple Moving Average will continue. (SMA)

Durable goods data will be closely watched by traders

The release of the Durable Goods Orders data and the flash PMI prints for March later in the early US session. These are the two items on the US economic docket that market players are now anticipating. This could affect the USD price dynamics and give the USDJPY combination a boost, along with the US bond yields. Today, traders will also take cues from the general risk mood in order to seize short-term prospects.

Fundamental Summary

Due to increased demand for safe-haven assets. The pair is staying steady in the red and is expected to lose money for the fourth week in a row.

On Friday, fresh sales of European banking shares were spurred by growing uncertainty regarding the banking sector’s simmering crisis. This shockwave rippled through the markets and prompted traders to swiftly move into safer assets. An unprecedented acquisition of Japanese government bonds following the BoJ maintained its ultra-loose policy. Increased demand for the safe-haven yen.

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