USDJPY Will the BOJ Manage to Reverse the Course?

12 thg 10, 2023

The USD/JPY currency pair is trading sideways after a two-day winning streak. Despite positive PMI data, the US dollar is moving lower towards the 105.50 level. Bank of Japan (BoJ) policymaker Noguchi is not optimistic about wage growth acceleration. USD/JPY has interrupted its winning streak, currently trading lower around 149.00 during the Asian session. Challenges for USD/JPY stem from the possibility of the Federal Reserve (Fed) ending the rate-hike cycle, fueling speculation among investors. Fed Governors Christopher Waller and Michelle Bowman hold different views on rate hikes and inflation. The US Producer Price Index (PPI) rose in September, surpassing expectations. Attention now turns to the release of the Consumer Price Index (CPI) and the weekly Jobless Claims report. The US Dollar Index (DXY) is facing challenges due to subdued US Treasury yields. The Japanese Yen (JPY) weakens due to the BoJ's ultra-accommodative monetary policy. BoJ board member Asahi Noguchi highlights the challenges in achieving the 2% inflation target and emphasizes the importance of wage growth. Noguchi suggests flexibility in maintaining an accommodative policy under the Yield Curve Control (YCC) to balance economic recovery and manage inflation expectations as the Japanese economy gradually recovers. On the chart, a strong demand zone can be observed from the level 148.4 to 148.95, which the price has used for a strong supported restart from the US CPI data, in addition to identifying an uptrend line. The goal will be to wait for the price at the intersection of the two trendlines and then evaluate a long entry. Leave a like and comment, greetings from Nicola, the CEO of Forex48 Trading Academy.