USDJPY Heads for 160 Again As Japan Core CPI Misses
USDJPY continues to maintain the positive bias, with the bullish momentum accelerating yesterday after a 100-pip surge that brought it closer to the 160 level. Last night the Japanese Nationwide Core CPI inflation report for May was released with expectations for a 4 point jump from 2.2% to 2.6%.
BOJ-FED Policy Divergence Supports USD/JPY
The pair has been consistently relying for support at key moving averages (SMA), reinforcing its upward momentum. Despite the release of the Bank of Japan (BOJ) minutes, which provided no new insights, the bullish sentiment remained strong. Now the price is approaching the critical level of 160 again which will be pivotal, considering that the Bank of Japan gets anxious when the Yen falls to these levels against the USD.
Fundamentals continue to support the USD against the Yen, with the Federal Reserve maintaining its hawkish stance of keeping rates higher-for-longer, and dismissing expectations for an early rate cut. The FOMC Dot Plot last week indicated only one rate cut this year, reinforcing the Fed’s commitment to higher interest rates for longer. In contrast, the Bank of Japan’s (BOJ) more dovish-than-expected position at the minutes last week has increased the pressure on the JPY. This divergence in monetary policy between the Fed and the BOJ continues to bolster USD/JPY .
USD/JPY Chart H4 – Buyers Keep Relying on MAs for Support
Japan Nationwide Core CPI Inflation Report for May
USD/JPY Live Chart
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