Yen Maintains Strength Amid Speculation on BoJ’s Policy Direction, US Dollar Wanes
The Yen sustained its advance against the Dollar for the fifth consecutive day, underpinned by market speculation of a potential shift in the Bank of Japan’s monetary policy, despite BoJ board member Seiji Adachi’s less hawkish commentary.
October’s Japanese Retail Trade figures fell short of expectations, yet this was tempered by positive industrial production data and upward revisions to prior readings.
Meanwhile, the Dollar’s struggle for momentum continues despite an optimistic US GDP report, as the market prices in a peak in US interest rates with potential easing on the horizon. Yield declines in US Treasury bonds further dampen the Dollar’s appeal, keeping the USD/JPY pair near recent lows.
Investors are now cautiously awaiting the US PCE Price Index, which may validate dovish Fed projections and potentially lead to further Dollar depreciation against the Yen.
In Tokyo, retail trade dipped in October, though year-on-year growth remained robust, and industrial output exceeded forecasts, indicating resilience in the economy. In contrast, the US economy’s growth rate revision to 5.2% in Q3 has been overshadowed by Federal Reserve officials’ dovish tones, suggesting forthcoming rate cuts in 2024.
USD/JPY Technical Outlook
The bearish outlook for USD/JPY persists as traders anticipate the US inflation data, with technical indicators pointing to potential further declines, targeting the 146.17 level, provided the pair remains below the 147.40 threshold.
The day’s projected trading range lies between support at 146.20 and resistance at 147.60, with a bearish trend expected to dominate.
USD/JPY Live Chart
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