USD/JPY Sees Uptrend Below 146.00 Amid US Dollar Strength and Middle East Tensions
In the early trading hours of Tuesday’s Asian session, the USD/JPY pair showcased a notable uptrend, positioning itself just shy of the 146.00 barrier. This upward movement, marked by a 0.08% increase on the day, finds its foundation in the strengthening of the US Dollar. Currently, the pair is trading at 145.90, reflecting a cautiously optimistic market sentiment.
Economic Indicators and Market Focus
Attention is now pivoting towards the US Empire State Manufacturing Index, expected to reveal a decline in January, a potential indicator of economic headwinds. Meanwhile, Japan’s recent economic data paints a brighter picture, with the Producer Price Index (PPI) for December rising to 0.3% month-on-month, a figure that outstrips previous estimates and maintains year-on-year stability.
BoJ’s Stance and Middle East Tensions
Amid these developments, Bank of Japan Governor Kazuo Ueda has emphasized the importance of persisting with ultra-loose monetary policies until the achievement of a sustainable 2% inflation rate is more certain. Concurrently, geopolitical tensions escalate as Iran’s Revolutionary Guard reportedly aids Houthi rebels in Yemen, potentially increasing the allure of the Japanese Yen as a safe-haven asset.
Fed Rate Cut Speculations and Upcoming US Data
The market is abuzz with speculation about the Federal Reserve’s next move, with a 71% likelihood of a rate cut in March, as per the CME FedWatch tool. Atlanta Federal Reserve President Raphael Bostic has cautioned against hasty rate cuts, highlighting the importance of reaching the Fed’s 2% inflation target without destabilizing the economic growth.
The upcoming US Empire State Manufacturing Index and a speech by Fed’s Christopher J. Waller are highly anticipated, as they could provide further insights into the Federal Reserve’s monetary policy direction.
Retail Sales Data and Its Impact on USD/JPY
Investors are also gearing up for Wednesday’s US Retail Sales data, projected to show a 0.4% increase in December. This data could play a crucial role in determining the short-term trend of the USD/JPY pair, offering a clearer picture of consumer spending and economic health in the United States.
USD/JPY Technical Analysis
From a technical standpoint, the USD/JPY pair exhibits bullish signs, having successfully crossed the 145.90 threshold. The pair is receiving support from the 50-day Exponential Moving Average (EMA), suggesting a potential continuation of the upward trend with targets set at 147.20 and 148.40.
However, should the pair fall below the 145.90 level, it could signal a reversal to a bearish correction.As the day progresses, the USD/JPY pair remains in focus, with traders closely monitoring the blend of economic data and geopolitical developments.
The expected trading range for the session lies between 145.50 as support and 147.00 as resistance, with prevailing market conditions suggesting a bullish trend for the day.
USD/JPY Live Chart
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