USDJPY loses the majority of its intraday gains following a robust advance in the first session.
The USDJPY pair loses the majority of its intraday gains after seeing strong bids near 154.00 in Monday’s North American session. The asset experienced a significant upward surge in the first session due to sharp weakening in the Japanese Yen (JPY), but it encountered pressure at elevated levels as the US Dollar (USD) fell after failing to continue its rally.
The probability of a coalition government in Japan has reduced the BoJ’s chances of raising interest rates.
The US Dollar Index (DXY) tracks the Greenback’s The value against six major currencies falls back after reaching an almost three-month high of 104.60. The Greenback’s rally appears to have stall as investors become cautious ahead of a slew of US economic data, including JOLTS Job Openings and Personal Consumption Expenditure Price Index (PCE) for September, Q3 Gross Domestic Product (GDP), and the ISM Manufacturing PMI and Nonfarm Payrolls (NFP) data for October, which will be release this week.
The economic data will have a substantial impact on market expectations for the Federal Reserve’s (Fed) expected interest rate action during the remaining two meetings this year. According to the CME FedWatch tool, traders have priced in an average rate drop of 25 basis points (bps) in November and are convinced that a similar The move will be made during the December meeting.
Market investors are likely to focus more on economic growth and labor market statistics, as Fed officials are confident that inflation will remain on pace to meet the bank’s 2% objective.
Meanwhile, the Yen’s outlook has fallen as the Japanese economy prepares to be led by a coalition government after the incumbent Liberal Democratic Party (LDP) failed to secure a majority of seats in the snap election. The scenario bodes poorly for future growth because Shigeru Ishiba will not be the only conservator of the economy. This has also lowered expectations of more interest rate hikes from the Bank of Japan (BoJ) this year.
https://voiceoftraders.com/analysis/pound-rises-ahead-of-the-uk-budget-us-labor-and-gdp-reports
