The Japanese Yen (JPY) extends its gains against the US Dollar (USD) on Wednesday. The USD/JPY pair faces challenges due to rising expectations of the Bank of Japan (BoJ) hiking rates again in 2024. Japan's parliament is scheduled to hold a special session on August 23 to discuss the Bank of Japan's (BoJ) decision to raise interest rates last month. BoJ Governor Kazuo Ueda is expected to attend the session, according to government sources cited by Reuters.
The safe-haven flows might have contributed support for the Yen amid rising geopolitical tensions in the Middle East. The BBC reported on Tuesday that the United States sent a guided missile submarine to the Middle East.
The US Dollar lost ground following lower-than-expected Producer Price Index (PPI) data from the United States (US) released on Tuesday. This has increased the bets for US Federal Reserve (Fed) interest rate cuts. Investors will likely observe the US CPI inflation report on Wednesday, which could offer some hints about the Federal Reserve’s (Fed) interest rate cut path.
USD/JPY trades around 146.80 on Wednesday. The daily chart analysis shows that the pair remains below the nine-day Exponential Moving Average (EMA), suggesting a bearish trend in the short term. Moreover, the 14-day Relative Strength Index (RSI) is positioned at the 30 level, suggesting a potential for a correction.
For support levels, the USD/JPY pair might test a seven-month low of 141.69, recorded on August 5, followed by a secondary support level at 140.25.
On the upside, the pair could face immediate resistance at the nine-day EMA around 147.45. A breakout above this level might reduce bearish momentum and enable the pair to approach the 50-day EMA at 153.40, with the potential to test the resistance level of 154.50, where previous support has now turned into resistance.
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.03% | 0.05% | -0.03% | 0.08% | 0.08% | 1.12% | -0.01% | |
EUR | -0.03% | 0.03% | -0.06% | 0.04% | 0.11% | 1.07% | -0.04% | |
GBP | -0.05% | -0.03% | -0.06% | 0.05% | 0.09% | 1.08% | -0.03% | |
JPY | 0.03% | 0.06% | 0.06% | 0.11% | 0.13% | 1.12% | 0.05% | |
CAD | -0.08% | -0.04% | -0.05% | -0.11% | 0.02% | 1.02% | -0.06% | |
AUD | -0.08% | -0.11% | -0.09% | -0.13% | -0.02% | 0.97% | -0.14% | |
NZD | -1.12% | -1.07% | -1.08% | -1.12% | -1.02% | -0.97% | -1.07% | |
CHF | 0.01% | 0.04% | 0.03% | -0.05% | 0.06% | 0.14% | 1.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan has embarked in an ultra-loose monetary policy since 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds.
The Bank’s massive stimulus has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy of holding down rates has led to a widening differential with other currencies, dragging down the value of the Yen.
A weaker Yen and the spike in global energy prices have led to an increase in Japanese inflation, which has exceeded the BoJ’s 2% target. With wage inflation becoming a cause of concern, the BoJ looks to move away from ultra loose policy, while trying to avoid slowing the activity too much.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.