aUSDJPY suffers its first daily loss in four days.
USDJPY bears flex biceps at 146.40, recording the first intraday loss of the day, down 0.10% on the day. As we go into Tuesday’s European session as result, the Yen pair validates the recent shift in the bias toward the Bank of Japan (BoJ). As well as Japan’s inflationary conditions. However, there are concerns regarding Japan’s job condition and the economy. The Yen pair sellers are spurred by a cautious mindset ahead of top-tier data/events.
However, Japan’s Unemployment Rate increased unexpectedly to 2.7% in July vs 2.5% predicted and before. While the Jobs / Applicants Ratio fell to 1.29 in July compared 1.30 expected and previous readings.
Japan’s government report highlights a ‘inflection moment’ in the country’s 25-year war against deflation, teasing BoJ hawks amid lower yields.
More crucially, the Japanese government just issued its annual report. Indicating that the inflationary circumstances in Japan had reached a tipping point. After 25 years of attempts to combat deflation. As a result, the hawkish tilt toward the Bank of Japan gains traction.
On Monday, the USDJPY pair was propelled by the mixed results of Japan’s Coincident Index for June and the Leading Economic Index for the same month. It’s worth mentioning that Bank of Japan Governor Kazuo Ueda mentioned a bit. below-target Japan inflation to defend the country’s present ultra-easy monetary policy at the Jackson Hole Symposium, prompting pair selling.
US CB Consumer Confidence is looking for a new impetus.
In other news, bearish yields have joined the general US Dollar weakness ahead of today’s US CB Consumer Confidence for August, weighing on the USDJPY price.
US 10-year Treasury bond rates are still hovering around 4.19%, while the US Dollar Index (DXY) has fallen to 103.85 as of press time. It is worth mentioning that US two-year bond coupons rebounded from the highest level since 2007 the previous day and stayed at 5.00% at the time of publication.
Goldman Sachs, on the other hand, cites the US growth prognosis and the Bank of Japan’s defense of easy-money policies to anticipate a 30-year high of roughly 155.00, up from 135.00 before. Forecast for the USDJPY pair.
Concerns regarding the Federal Reserve’s (Fed) and Bank of Japan’s (BoJ) monetary policies will join the risk triggers to delight USDJPY traders. Ahead of the US Conference Board’s (CB) Consumer Confidence Index for August. Which is predicted to be 116.2 vs the preceding 117.00.
USDJPY Technical Outlook
The practically overbought RSI (14) line, together with the inability to pass a two-month-old ascending resistance line. Close to 146.80 at the latest, point to a USDJPY price decline towards the 144.60-50 support zone. Which includes various levels established since April.
