USDJPY has safely moved below 140.00.
In the Asian session, the USDJPY pair’s auction has moved below the critical support level of 140.00. The pair became fragile as a result of the US Dollar Index’s (DXY) movements. After failing to maintain a new two-month high at 104.31. The USD Index has extended its retreat to close to 104.11. The change made in the USDJPY pair appears stronger relative to the USD index correction, suggesting that the Japanese Yen has also gained some strength.
Losses on the S&P500 futures have increased during the Asian session, extending the risk aversion theme. US stocks were heavily purchased on Thursday, driven mostly by a strong rebound in technology. And financial industries. Investors are growing concerned as discussions between. White House officials and Republican leaders appear to drag on forever. As the US economy rapidly approaches a default crisis.
Gains in US Treasury rates are being driven by concerns about the US economy going bankrupt. The 10-year US government bond rates are now higher than 3.83%.
On Friday, the USD is anticipated to take a power-pack action. During the April statistics on US Durable Goods Orders release. The economy is reportedly falling by 1.0% after previously reporting a growth of 3.2%.
No rate increase in June is supported by Federal Reserve officials.
Numerous economic indicators in the US economy call for the Federal Reserve (Fed) to stop its policy-tightening phase. At its June monetary policy meeting. The Consumer Price Index (CPI) is steadily slowing down, the US labor market has begun to cool off. And businesses are preparing for a gloomy economic future. According to Reuters, Federal Reserve emergency lending to banks plummeted to its lowest weekly level since the banking industry began experiencing problems in March.
This demonstrates that businesses are use their reserved revenues to are either operating. At a reduced capacity or have reduced their working capital requirements to avoid higher interest rates.
Investors should be aware that some Federal Reserve officials noted that additional interest rates are less certain owing to tight lending conditions by US regional banks. In the minutes from May’s Federal Open Market Committee (FOMC).
After dovish remarks from Boston, expectations of a halt on the rate-hiking trend for June became firmer. Susan Collins, the president of the Federal Reserve Bank, indicated on Thursday that the Federal Reserve “may be at or near” the point when it should stop raising interest rates, according to Reuters. “While inflation is still too high, there are some promising signs of moderation,” she continued.
Bank of Japan may alter the yield control curve in the future.
a bank On Thursday, Governor Kazuo Ueda stated that if the benefit to cost ratio of the policy were to change, they may modify the Yield Curve Control (YCC) plan. As part of YCC, the Bank of Japan has left flexibility for reducing bond yield goals from the present 10-year range to a 5-year range.
After the decelerated Tokyo CPI (May) numbers were released, the Japanese Yen gained some momentum. The street was expecting an increase to 3.9%, but headline inflation has moderated to 3.2% from the preceding report of 3.5%. The core CPI, which excludes prices for food and oil, came in at 3.9% as opposed to predictions for 4.3%, although it was still higher than the previous announcement of 3.8%.
USDJPY Technical Outlook
After producing a breakout of the Ascending Triangle chart pattern created on the daily scale, USDJPY has added big gains.
The pair is advancing strongly in the direction of the horizontal resistance line drawn from the high of November 11, 2022, at 142.25.
The upward momentum is active, as seen by the Relative Strength Index (RSI) (14) moving in the positive region of 60.00-80.00.
