USDJPY struck a fresh 12-month high early on Thursday, nudging above 150.30.
Late on Wednesday, the USDJPY broke through to a 12-month high over 150.30. As investors continued to test the Bank of Japan’s (BoJ) willingness to hold the 150.00 handle. Where the BoJ has previously drawn a line in the sand several times.
US Treasuries are strengthening the US Dollar as they approach 16-year highs.
Broad-market risk aversion and rising US Treasury rates. Which are still hitting 16-year highs. Continue to support the US dollar. On Wednesday, the 10-year T-note finished at 4.957%. A yield not seen by the Treasury bond since early 2007.
The Bank of Japan (BoJ) is still one of the few major central banks. That hasn’t significantly increased interest rates in an effort to boost long-term inflation in Japan over the past two years. Despite this, the BoJ is still concerned that inflation pressures within the Japanese economy may fall short of their 2% target.
Investors on Wall Street are counting for the Bank of Japan to reverse course as soon as its next meeting, potentially giving up on its negative-rate short-term rate regime and yield curve control mechanism.
Another wave of Japanese inflation statistics will be released throughout the Asia trading session on Friday. The Tokyo Consumer Price Index (CPI) scheduled for Thursday at 23:30 GMT.
Investors will be closely monitoring the Core Tokyo CPI inflation print to determine whether the BoJ will be penalized into implementing policy changes soon. The Core Tokyo CPI, which measures headline inflation less volatile food prices, is predicted to remain stable at 2.5% for the year through October.
USDJPY Technical Outlook
Late on Wednesday, the USDJPY strengthened to 150.32, hitting a new high for 2023 and the pair’s strongest bids in a year.
The pair is trading back below 150.20 ahead of Thursday’s Asia trading day, despite the Dollar-fueled pump.
With insufficient technical resistance above to draw significant boundaries, the USDJPY is currently trading in a no-man’s-land.
However, the pair’s long-term optimistic outlook for the 50-day Simple Moving Average (SMA), which is currently rising into 148.00, is the main area of technical support for the majority of 2023. In contrast, the 200-day SMA is stuck around 140.00, much below the current price movement.
