Aside from that, a slight US dollar drop has dragged the USDJPY exchange rate off from its 2-month high reached on the day.

USDJPY movements on Tuesday trading

The USDJPY rose 0.96 percent on Tuesday. After a 0.07 percent rise on Monday afternoon.The dollar’s yen closed at 150.771. The USDJPY dipped down as low as 149.232 prior to rallying to 150.884 level.

Actions with the BoJ

In the final days of Dec of 2023, the USDJPY hit a fourth quarter trough of 140.249 zone. A strong American economy and prices eclipsed investor wagers on the BoJ’s exit off negative interest rates.

Nevertheless, the BoJ helped the dollar’s yen rebound to 150. The central bank is currently sending muddy signals about the timing of a move away from minus interest rates. Additionally, the Bank of Japan dashed market projections of an aggressive rate course.

In the month of Feb, BoJ Deputy Governor Uchida warned traders that times are ideal for a shift away from negative interest rates. Nevertheless, he warned that rates of interest are unlikely to climb quickly following exiting negative rate territory.

The Bank of Japan prioritizes wage increases, consumer expenditure, and the service industry. Analysts anticipate the Bank of Japan will shift course during the spring wage increase discussions. The Central Bank requires an increase in driven by demand inflation in order to regain equilibrium in prices. Nevertheless, the bank’s rate of interest path continues unclear. Macroeconomic data and the Bank of Japan’s future forecasts must converge in order to encourage a USDJPY recovery to 140 level. A further issue is the possibility of intervening to support the Japanese yen.

The US the Consumer Price Index Data US Fed Impact

Upon Wed, investors will concentrate on FOMC official’s remarks. Predictions on US Fed lowering rates in 1st half of 2024 were sunk as the U.S. Inflation figure came in higher than predicted.

Based per the CME FedWatch, the likelihood of a March U.S Fed rates decrease has dropped from 16 percent to 8.5 percent. The likelihood of a 25 bps U.S Fed rate drop in May fell as 52.3 percent to 35.2 percent. Aggressive U.S Fed comments backing an increased cautious posture on rates might result in higher USDJPY advances.

Near-Term Outlook

The USDJPY’s short-term patterns are influenced by th U.S Fed talk and BoJ indications on an interest rate hike around April. Yet, an additional hardline than anticipated US central bank rate hike trajectory might persist to fuel demand from buyers for the US dollar versus yen.

USDJPY Value Execution: Daily Graph.

The USDJPY traded significantly higher than the 50 & 200 D-EMA, showing positive pricing signs.

The USD versus yen the rise towards the 151 mark could put the 151.889 level of resistance into action. On Wed, the BoJ with the US Federal Reserve’s remarks must be considered.

Still, if the price falls below the 150.201 supporting stage, the sellers will attack the 148.405 supportive area. The 14-t D-RSI of 69.08 implies a USDJPY rebound towards the 151 level prior to approaching overheated terrain.

The 4-Hour Graph

The USDJPY held over the 50 & 200 D- EMAs, continuing the current positive pricing pattern. The pair rebound towards the 151 level might encourage a push to the 151.889 barrier area.

Nevertheless, an excursion under the 150.201 supporting line would put the 50 D-EMA with the 148.405 supporting mark into account. The 14-time frame 4-hourly RSI of 82.01 shows that the USDJPY is overvalued. Pressure to sell might increase near the 151 region.

Daily Technical Indicators & Signals