CFD Trading Rate US Dollar vs Japanese Yen (USDJPY)

USD/JPY had a choppy session last Friday. Pair was last at 142.64, OCBC FX analysts Frances Cheung and Christopher Wong note.  

Risks skewed to the downside

“Last Friday, USD/JPY traded up to high of 146.49 after candidate Takaichi managed to get into run-off against Ishiba. But it turned out that Ishiba beat Takaichi, who has been vocal against BoJ raising rates. The risk she may win was one of the factors that kept USD/JPY rather supported for most of last week. And as soon as run-off results was known, USD/JPY fell sharply.”

“We still expect the direction of travel for USD/JPY to be down but the BoJ going for a gradual pace of policy normalisation may see pace of USD/JPY decline slow in the short term. To add to uncertainty, PM Ishiba plans to dissolve parliament on 9 Oct and calls for general elections on 27 Oct. Political uncertainty may see Japanese equities fall further, and that may weigh on USD/JPY.” “Bullish momentum on daily chart is fading while RSI fell. Risks skewed to the downside but consolidation likely to hold. Support at 142, 139.60 levels (recent low). Resistance at 143.30 (21 DMA), 144.80 (23.6% fibo retracement of Jul high to Sep low) and 146.20 (50 DMA).”

• USD/JPY kicks off the new week on a positive note and stalls Friday’s pullback from a multi-week top.
• The upbeat market mood, Japan's politics and mixed data from Japan undermine the safe-haven JPY. 
• The divergent BoJ-Fed policy expectations keep a lid on any further appreciating move for the pair. 

The USD/JPY pair attracts some dip-buyers at the start of a new week and reverses a part of Friday's sharp retracement slide from the 146.50 area or over a three-week high. Spot prices, however, retreat a few pips in the last hour and currently trade around mid-142.00s, up less than 0.25% for the day.

The already upbeat market mood gets an additional boost in reaction to more stimulus announced by China over the weekend. In fact, the People's Bank of China (PBOC) on Sunday said it would tell banks to lower mortgage rates for existing home loans. Furthermore, Japan's incoming Prime Minister (PM) Shigeru Ishiba said that the Bank of Japan's (BoJ) monetary policy must remain accommodative to underpin a fragile economic recovery. This, along with news that the new PMI is planning a general election for October 27 and mixed Japanese economic data, undermines the Japanese Yen (JPY) and is seen lending support to the USD/JPY pair. 

A government report published earlier today showed that Japan's Retail Sales rose 2.8% in August from a year earlier as compared to market expectations for an increase of 2.3% and the 2.7% growth registered in the previous month. This, however, was offset by dismal Industrial Production data, which contracted more than anticipated, by 3.3% during the reported month and did little to impress the JPY bulls. That said, the growing market conviction that the BoJ will hike interest rates again by the end of this year helps limit any meaningful JPY losses. Apart from this, subdued US Dollar (USD) price action contributes to capping the USD/JPY pair. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near its lowest level since July 2023 touched on Friday amid bets for a more aggressive policy easing by the Federal Reserve (Fed). This, in turn, warrants some caution before positioning for a further intraday appreciating move for the USD/JPY pair. Traders now look to the release of the official Chinese PMI prints for some impetus. The focus, however, will be on Fed Chair Jerome Powell's speech later during the US session.

• USD/JPY falls further to 142.50 on multiple headwinds.
• Japan Ishiba’s victory in PM elections has strengthened the Japanese Yen.
• Cooling US inflationary pressures have weighed on the US Dollar.

The USD/JPY pair nosedives to near 142.50 in Friday’s North American session. The asset weakens as the victory of Japan's former defence minister Shigeru Ishiba in the Prime Ministerial contest has strengthened the Japanese Yen (JPY).

A sharp rally in the Yen suggests that the market participants expect the victory of new PM Shigeru Ishiba to be favorable for further interest rate hikes by the Bank of Japan (BoJ). In his previous comments, Ishiba told Reuters that the central bank was "on the right policy track" with rate hikes thus far.

Meanwhile, a sharp weakness in the US Dollar (USD) after the release of the softer-than-expected United States (US) Personal Consumption Expenditure Price Index (PCE) data for August has also prompted further downside in the asset. Annual PCE inflation decelerated to 2.2%, faster than estimates of 2.3% and the July’s reading of 2.5%. The core PCE price index, which excludes volatile food and energy prices and is a Federal Reserve’s (Fed) preferred inflation measure, rose expectedly by 2.7%.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near the Year-to-date (YTD) low of 100.20. More weakness in the US Dollar would result in a fresh bear cycle.

A further slowdown in US inflationary pressures has added to expectations that the Fed could cut interest rates by 50 basis points (bps) again in November. The Fed pivoted to policy-normalization with a larger-than-usual 50 bps rate last week due to growing concerns over deteriorating job growth.

The US Dollar (USD) could rise 145.50; a sustained advance above this major resistance level is unlikely. In the longer run, USD has to break and maintain a foothold above 145.50 before further advance is likely, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

USD/JPY can rise towards 145.50 near term

24-HOUR VIEW: “Yesterday, when USD was at 144.60, we indicated that ‘the advance in USD has scope to extend above 145.00, but the major resistance at 145.50 is likely out of reach for now.’ We also indicated that ‘to maintain the buildup in momentum, USD must remain above 144.00 with minor support at 144.35.’ Our view was not wrong, as USD rose to 145.21, dropped to 144.10 and then closed largely unchanged at 144.80 (+0.03%). While upward momentum has not increased significantly, today, USD could rise above the major resistance at 145.50. A sustained advance above this level seems unlikely. The next resistance at 146.10 is also unlikely to come into view. Support levels are at 144.65 and 144.25.”

1-3 WEEKS VIEW: “In our most recent narrative from Monday (23 Sep, spot at 144.20), we highlighted that ‘the strong advance in USD last week reinforces our view that USD could recover further to 145.50.’ Yesterday, USD rose and reached a high of 145.21. We continue to expect USD to rise to 145.50, but it has to break and maintain a foothold above this level before a further advance is likely. Given that momentum has not increased much, the chance of it reaching the next major resistance at 147.00 is not high for now (there is another resistance at 146.10). Overall, we will remain positive USD as long as 143.40 (‘strong support’ level previously at 142.30) is not breached.”

• USD/JPY gather strength around 145.20 in Friday’s early Asian session, gaining 0.26% on the day. 
• Tokyo CPI rose 2.2% YoY in September vs. a 2.6% rise prior.
• The US August core PCE data will be closely monitored. 

The USD/JPY pair attracts some buyers to near 145.20 on Friday during the early Asian session. The pair gains ground near three-week highs after the Tokyo Consumer Price Index (CPI). The attention will shift to the US Personal Consumption Expenditures (PCE) Price Index for August, which is due later on Friday. 

Data released by the Statistics Bureau of Japan showed on Friday that the headline Tokyo Consumer Price Index (CPI) increased 2.2% YoY in September, compared to a 2.6% rise in August. Meanwhile, the CPI ex Fresh Food, Energy climbed 1.6% YoY in September, compared to a 1.6% rise in the previous reading. Tokyo CPI ex Fresh Food rose 2.0% for the said month, compared to a 2.4% rise in August and in line with the market consensus of 2.0%.

The Japanese Yen (JPY) edges lower in an immediate reaction to Tokyo’s CPI inflation data. The slower price increase is unlikely to deter the Bank of Japan (BoJ) from raising interest rates later this year as BoJ Governor Kazuo Ueda committed to hiking its borrowing costs if the economy performs as expected. 

However, uncertainty surrounding Japan’s interest rate path might cap the upside for the JPY and create a tailwind for USD/JPY in the near term. Ueda said this week that the Japanese central bank is not in any rush to raise rates and can wait for more data before making any moves. The BOJ is expected to stand pat on rates at the October meeting. 

On the other hand, the Fed delivered a jumbo rate cut last week and signaled another 50 basis points (bps) reductions before year-end. On Thursday, Fed Governor Lisa Cook said that she endorsed the 50 bps interest rate cut last week as a way to address increased "downside risks" to employment. The dovish remarks from the Fed officials are likely to drag the Greenback lower against the JPY in the near term.

Market players will closely watch the release of the US August core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation indicator, on Friday for fresh impetus. A surprise upside inflation reading could dampen the rate-cut hopes for the November meeting and provide some support to the US Dollar (USD). 

• USD/JPY trades flat at 144.72 after hitting a three-week high of 145.21, as election uncertainty dampens momentum.
• Doji candlestick and flat RSI suggest market indecision, with key resistance at the 50-DMA of 146.49.
• A break below 144.11 could lead to further declines, testing support levels at 143.39 and 142.39.

The USD/JPY remains subdued after seesawing within a 110-pip range, where the pair hit a three-week high of 145.21. Uncertainty around the Japanese election has overshadowed speeches by Bank of Japan (BoJ) officials, who decided to hold rates unchanged last week. At the time of writing, the major trades at 144.72, flat.

USD/JPY Price Forecast:  Technical outlook

From a technical standpoint, the downtrend is set to continue. Thursday’s price action forms a ‘doji’, meaning neither buyers nor sellers commit to solid positions. Even the Relative Strength Index (RSI), despite showing bulls in charge, the RSI slope is flat at 51.

If USD/JPY buyers push prices above the September 26 high at 145.21, that could prompt a challenge of the 50-day moving average (DMA) at 146.49 before testing the 147.00 mark. The next resistance would be the bottom of the Ichimoku Cloud (Kumo) at around 148.20-50.

Conversely, if the pair slumps below the September 26 low of 144.11, that will test the Kijun-Sen at 143.39, followed by the Senkou Span A at 142.89. On further weakness, the Tenkan-Sen will be the Bulls' last line of defense at 142.39.

USD/JPY Price Action – Daily Chart

Advance in US Dollar (USD) has scope to extend above 145.00; the major resistance at 145.50 is likely out of reach for now. In the longer run, sharp advance reinforces view that USD could recover further to 145.50, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

USD can recover further to 145.50

24-HOUR VIEW: “We indicated yesterday that ‘the price action still seems to be part of a range trading phase, even though it is likely to trade in a lower range of 142.30/144.10 today.’ However, after dipping to 142.89, USD soared, reaching a 3-week high of 144.84. The advance has scope to extend above 145.00 today. The major resistance at 145.50 is likely out of reach for now. To maintain the buildup in momentum, USD must remain above 144.00 with minor support at 144.35.”

1-3 WEEKS VIEW: “In our most recent narrative from three days ago (23 Sep, spot at 144.20), we highlighted that ‘the strong advance in USD last week reinforces our view that USD could recover further to 145.50.’ We will continue to hold the same view provided that 142.30 (‘strong support’ level previously at 141.90) is not breached. Looking ahead, the next level to monitor above 145.50 is 147.00.”

• USD/JPY has returned to trade back inside its rising channel after a false breakdown. 
• The pair is in a short-term and long-term uptrend suggesting a bias towards the upside. 

USD/JPY has recovered back inside its rising channel after a temporary downside break on September 24. 

The pair has broken above the 50, 100 and 200-period Simple Moving Averages (SMA) and is in an established short-term uptrend.

USD/JPY 4-hour Chart 

Given it is a principle of technical analysis that “the trend is your friend” the odds favor a continuation higher. 

Momentum as measured by the Relative Strength Index (RSI) is confirming the bullish bias, although it is easing somewhat. 

A break above the current day’s high of 145.20 would suggest a continuation of the trend with tentative targets lying at 145.50 and finally in a bullish case 146.00. 

The medium-term trend was bearish but it is now unclear and could arguably be bullish. USD/JPY remains in a long-term uptrend.

• USD/JPY loses traction around 144.60 in Thursday’s early Asian session, down 0.10% on the day. 
• Dovish Fed and rising bets on jumbo rate reduction weigh on the USD. 
• Board members call for a gradual and timely rate increase, noted BoJ Minutes. 

The USD/JPY pair edges lower to near 144.60 during the early Asian session on Thursday. The weakening of the US Dollar (USD) amid rising bets on a jumbo interest rate reduction from the US Federal Reserve (Fed) in November continues to weigh on the pair. Investors await economic data and signals on upcoming interest rate cuts from Fed officials.

Data released by the Commerce Department showed on Wednesday that US New Home Sales fell 4.7% MoM to 716,000 in August from a revised 751,000 in July, above the market consensus. Earlier this week, a weaker-than-expected US consumer sentiment report raised concerns about the health of the labor market, prompting the expectation of further deeper rate cuts by the Fed. 

Traders have priced in nearly 57.4% odds of a 50 basis points (bps) cut by the Fed in the November meeting, while the chance of a 25 bps reduction stands at 42.6%, according to the CME FedWatch Tool. The Fed Chair Jerome Powell's speech will be in the spotlight on Thursday. Also, the final US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) is due later in the day, and the figure is estimated to grow by 3.0%. Any indication of additional jumbo rate reduction by the Fed or signs of weakness in the US economy might drag the Greenback lower in the near term. 

On the other hand, the Bank of Japan (BoJ) releases minutes of its July policy meeting on Thursday. The BoJ members called for a gradual and timely rate increase. Many members said it was appropriate to raise the interest rates to 0.25%, adjusting the degree of monetary support and few members said it was appropriate to adjust the degree of monetary support moderately.

Finance Minister Shunichi Suzuki said on Tuesday that the central bank will take appropriate monetary policy actions while continuing to coordinate closely with the government. The potential for the BoJ to delay raising interest rates further might undermine the JPY and cap the downside for USD/JPY.

• USD/JPY climbs over 0.90% to 144.54, buoyed by a rise in the US 10-year Treasury yield.
• Despite the uptick, the pair shows a downward trend, remaining below the Ichimoku Cloud and 200-DMA.
• RSI crosses above the neutral line, suggesting potential for continued gains in the short term.
• Key resistance at 145.00, with subsequent levels at 146.73 (50-DMA) and 147.00.
• A fall below 144.00 could find support at 143.39 (Kijun-Sen), 142.76 (Senkou Span A), and 142.13 (Tenkan-Sen).

The USD/JPY edges up during the North American session, registering gains of over 0.90% as the US Dollar stages a comeback. The rise in the US 10-year T-note yield sponsored a leg-up in the pair, which trades at 144.54 at the time of writing.

USD/JPY Price Forecast: Technical outlook

Despite rallying during the session, the USD/JPY remains downward biased, as the exchange rate persists below the Ichimoku Cloud (Kumo) and the 200-day moving average (DMA).

The Relative Strength Index (RSI) has just pierced its neutral line, opening the door for further upside in the near term.

With that said, the USD/JPY next resistance would be the 145.00 psychological figure ahead of testing the 50-DMA at 146.73. On further strength, the pair could hit the 147.00 figure.

Conversely, if USD/JPY tumbles below 144.00, this could pave the way to challenge the Kijun-Sen at 143.39, followed by the Senkou Span A at 142.76 and the Tenkan Sen at 142.13.

USD/JPY Price Action – Daily Chart

Sharp advance reinforces view that the US Dollar (USD) could recover further to 145.50, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

USD/JPY can go up to 145.50

24-HOUR VIEW: “We expected USD to trade between 143.00 and 144.20 yesterday. USD subsequently traded in a wider range of 143.11/144.68, closing at 143.21 (-0.27%). The price action still seems to be part of a range trading phase, even though it is likely to trade in a lower range of 142.30/144.10 today.”

1-3 WEEKS VIEW: “Our update from two days ago (23 Sep, spot at 144.20) remains valid. As highlighted, the strong advance in USD last week reinforces our view that USD could recover further to 145.50. Our view will be invalidated if USD breaks below 141.90 (no change in ‘strong support’ level).”

• USD/JPY has broken out of a rising channel in a sign of weakness for the uptrend. 
• RSI is diverging bearishly with price – a further negative sign. 

USD/JPY has been rallying higher since it reversed at the December 2023 low on September 16. 

It has established a sequence of higher highs and higher lows and could be said to be in a short-term uptrend.

USD/JPY 4-hour Chart 

Given it is a principle of technical analysis that “the trend is your friend” the odds favor a continuation higher. 

On Tuesday, however, price broke out of the rising channel, indicating weakness and that the established uptrend might be faltering. On its own, however, it is not sufficient to indicate a complete reversal lower. 

The overall bias in the short-term is still mildly bullish, however it would now take a close above 144.68 (September 24 high) to provide stronger confirmation of more upside. Tentative targets then lie at 145.00, then 145.50 and finally in a bullish case 146.00. 

The Relative Strength Index (RSI) is showing bearish divergence with price (red dashed line on chart above). Although price was not lower on the September 24 lows compared to the September 20 lows, the RSI was lower, indicating strong downside momentum in the recent sell-off. This could be a sign of underlying weakness.

The pair is in a medium-term downtrend suggesting a risk of a resumption lower, however, those risks are balanced by the fact that it is in a long-term uptrend.

• USD/JPY flatlines around 143.20 in Wednesday’s early Asian session. 
• Investors raise their bets on a jumbo rate cut from the US Fed in November.
• The BoJ Governor signals no rush to raise rates further. 

The USD/JPY pair trades flat near 143.20 despite the weaker US Dollar (USD) during the early Asian session on Wednesday. However, the rising expectation of a jumbo rate cut by the US Federal Reserve (Fed) in November might continue to weigh on the pair. 

Fed Governor Michelle Bowman said on Tuesday that key measures of inflation remain "uncomfortably above" the 2% target, warranting caution as the Fed proceeds with cutting interest rates. However, she preferred the Fed to lower by a quarter percentage point, more in line with the traditional moves at the central bank. 

Fed Governor Adriana Kugler is set to speak later on Wednesday. The release of the US Personal Consumption Expenditures (PCE) Price Index for August will be in the spotlight on Friday. Any dovish comments from Fed officials and signs of softer inflation could undermine the USD against the Japanese Yen (JPY). 

Data released by the Conference Board on Tuesday showed that the US Consumer Confidence Index fell to 98.7 in September from a revised 105.6 in August. This figure registered the biggest decline since August 2021. 

On the other hand, the speculation that the Bank of Japan (BoJ)  was in no rush to raise interest rates further might drag the JPY lower and cap the downside for USD/JPY. The BoJ Governor Kazuo Ueda said on Tuesday that the central bank can afford to spend time watching developments in financial markets and overseas economies as it sets monetary policy.

 

• USD/JPY retreats after a two-week peak of 144.68, dragged down by declining US Treasury yields.
• Technical indicators maintain a bearish stance with the pair below the Ichimoku Cloud and 200-DMA, suggesting more declines.
• Key supports identified at the September 20 low of 141.73 and the September 16 low of 139.58.
• For a bullish reversal, USD/JPY must surpass the Kijun-Sen at 143.44, with further hurdles at 144.00 and the recent high of 144.68.

The USD/JPY retreats after hitting a two-week high of 144.68, sliding some 0.28%. The Greenback is getting battered by worse-than-expected US data and falling US Treasury yields. This and investors' pricing in a 50-basis point (bps) rate cut by the Fed undermined the pair, which trades at 143.14.

USD/JPY Price Forecast: Technical outlook

Despite testing the 144.00 figure for three consecutive trading days, the pair remains in a sustained downtrend. USD/JPY buyers failed to conquer the previously mentioned price level, spurring a leg-down on Tuesday.

The Relative Strength Index (RSI) hints that momentum favors sellers. USD/JPY remaining below the Ichimoku Cloud (Kumo) and the 200-day moving average (DMA) could pave the way for testing lower prices.

The next critical support level will be the September 20 low of 141.73, ahead of dropping to the September 16 low of 139.58.

Conversely, if USD/JPY edged toward the Kijun-Sen at 143.44 and clears that level, the pair could aim to challenge 144.00. Further upside is seen over the two-week high of 144.68.

USD/JPY Price Action – Daily Chart

• USD/JPY is channeling higher in a short-term uptrend. 
• It is likely to extend, although the medium-term bear trend risks pushing it lower again.

USD/JPY has risen up in a channel since bottoming out at the September 16 low. 

The rising peaks and troughs, suggest the pair might now be in a short-term uptrend, which favors long holders. 

USD/JPY 4-hour Chart 

Since “the trend is your friend” the short-term outlook, therefore, is mildly bullish. 

A break above 144.68 (September 24 high) would provide confirmation of more upside, to a tentative target at 145.00, then 145.50 and finally in a bullish case 146.00. 

A decisive break below the lower channel line, would negate the bullish bias. 

The pair is in a medium-term downtrend suggesting a risk of a resumption lower, however, those risks are balanced by its long-term uptrend.

The US Dollar (USD) is expected to trade between 143.00 and 144.20. In the longer run, sharp advance reinforces view that USD could recover further to 145.50, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Break above 144.20 to lead to 145.50

24-HOUR VIEW: “Our view for “further USD strength” did not turn out, as it traded between 143.16 and 144.45, closing at 143.60. The price movements appear to be part of a range trading phase. Today, we expect USD to trade between 143.00 and 144.20.”

1-3 WEEKS VIEW: “Our update from yesterday (23 Sep, spot at 144.20) remains valid. As highlighted, the strong advance in USD last week reinforces our view that USD could recover further to 145.50. Our view will be invalidated if USD breaks below 141.90 (no change in ‘strong support’ level).”

• USD/JPY loses ground around 143.55 in Tuesday’s early Asian session. 
• Fed rate cut maintains bearish mood surrounding USD/JPY. 
• BoJ policymakers tempered another hike speculation, which might cap the JPY’s upside; rising geopolitical risks could boost the JPY. 

The USD/JPY pair trades with mild losses near 143.55 during the early Asian session on Tuesday. The decline in US Dollar (USD) continues to weigh on the pair. The US September Consumer Confidence is due later in the day and the Federal Reserve (Fed) Governor Michelle Bowman is set to speak.  

The Fed rate cut last week had been highly expected, though the decision to cut by 50 basis points (bps) was somewhat of a surprise. Minneapolis Fed President Neel Kashkari said on Monday that he believes there should be and will be additional interest rate cuts in 2024. However, Kashkari expects future cuts to be smaller than the one from the September meeting. 

Chicago Fed President Austan Goolsbee noted, “Many more rate cuts are likely needed over the next year, rates need to come down significantly.” Additionally, Atlanta Fed President Raphael Bostic said Monday that the US economy is close to normal rates of inflation and unemployment and the central bank needs monetary policy to "normalize" as well. The Greenback remains under pressure amid the rising expectation that the Fed will cut additional interest rates in the remainder of 2024. 

However, the speculation that the Bank of Japan (BoJ) is not in a rush to raise interest rates might cap the upside for Japanese Yen (JPY). The BoJ left interest rates unchanged last week as policymakers need time to assess when it needs to raise borrowing costs further. "The majority of market players had expected the next rate hike to take place in December, but Mr. Ueda's remarks prompted some of them to think that maybe it will be delayed until early next year,” said Tomoichiro Kubota, senior market analyst at Matsui Securities Co.

Meanwhile, the rising geopolitical tensions in the Middle East might boost the safe-haven flows, benefiting the JPY. Bloomberg reported early Tuesday that Israel carried out airstrikes on targets in southern Lebanon, killing almost 500 people in one of the bloodiest days of fighting in nearly two decades and fuelling concerns of all-out conflict. 

• USD/JPY falls to 143.45 after reaching a daily high of 144.46, pressured by softer US data fueling Fed rate cut speculation.
• Technical outlook remains bearish, with momentum favoring sellers as the pair fails to clear resistance at 143.81 (Kijun-Sen).
• Key support levels include the Senkou Span A at 142.92 and the Tenkan-Sen at 142.03, with further downside targeting 141.73 and 139.58.

The USD/JPY snapped two days of gains and dropped late in the North American session following softer-than-expected US economic data, fueling rate cut speculation by the Federal Reserve. At the time of writing, the pair trades at 143.45 after hitting a daily high of 144.46.

USD/JPY Price Forecast: Technical outlook

From a technical standpoint, the USD/JPY is downward biased despite printing a leg-up after bouncing from the September 16 low of 139.58 to the September 20 high of 144.49. It should be said that the rally continued to remain capped by the Kijun-Sen at 143.81, opening the door for further losses.

Momentum remains negative, as the Relative Strength Index (RSI) portrays. Therefore, tha path of least resistance is tilted to the downside.

The first support would be the Senkou Span Aat 142.92, followed by the Tenkan-Sen at 142.03, before challenging the September 20 swing low of 141.73. If surpassed, the USD/JPY could aim toward the September 16 pivot low of 139.58.

Conversely, if USD/JPY buyers move in and push prices above 144.00, further upside lies above the September 20 high of 144.49.

USD/JPY Price Action – Daily Chart

• USD/JPY gains above 144.00 after the release of the mixed preliminary US S&P Global PMI data for September.
• The US Services PMI came in better-than-forecasted at 55.4.
• Investors await BoJ Ueda’s speech on Tuesday.

The USD/JPY pair moves higher above 144.00 in Monday’s North American session after the release of the mixed preliminary United States (US) S&P Global Purchasing Managers’ Index (PMI) data for September.

The report showed that the Composite PMI expanded at a slower pace to 54.4 from 54.6 in August. A sharp contraction in activities in the manufacturing sector was offset by better-than-projected service sector activity. The Manufacturing PMI declined unexpectedly to 47.0, which was expected to have improved to 48.5 from the prior release of 47.9. The Services PMI, a measure of activities in the services sector that accounts for two-thirds of the US economy, lands higher at 55.4 from the estimates of 55.2 but remained lower than the prior reading of 55.7.

Mixed flash US PMI has prompted some recovery in the US Dollar (USD) as the US Dollar Index (DXY) gathers strength to decisively break above 101.00. Going forward, the US Dollar will be guided by market expectations of the Federal Reserve’s (Fed) interest rate outlook.

The asset struggles for a direction as investors await the Bank of Japan (BoJ) Governor Kazuo Ueda’s speech on Tuesday, in which he is expected to provide fresh guidance on the interest rate outlook.

Last week, the comments from Kazuo Ueda in the press conference after the monetary policy decision indicated that the BoJ is in no rush to hike interest rates further. BoJ Governor Kazuo Ueda said, "Our decision on monetary policy will depend on economic, price, and financial developments at the time. Japan's real interest rates remain extremely low. If our economic and price forecasts are achieved, we will raise interest rates and adjust the degree of monetary support accordingly," at the press conference.