USDJPY to Reach 150 Soon After Quickly Returning to Resistance
USDJPY climbed above 149 on Monday after surging 7 cents higher last week. It was rejected in the first attempt but has returned there again
USDJPY climbed above 149 on Monday after surging 7 cents higher last week, but was rejected in the first attempt. However, the retreat was shallow and the price returned above 149 yesterday, which signals strong buying pressure and a break above mid-August high, which would be considered a trend reversal officially and send the price to 150 as the first target.
USD/JPY Chart Daily – Buyers Will Likely Break Above Resistance
Since hitting September lows below 140, the USD/JPY has rebounded by approximately 10 cents, but it faces resistance as buyers continue to exert strong influence. The recent impact of new Japanese Prime Minister Ishiba has negatively affected the Yen. His shift away from the Bank of Japan’s previous calls for interest rate hikes has contributed to the ongoing rally in the USD/JPY pair.
Moreover, demand for the USD has strengthened following last week’s robust US employment figures and comments from Fed Chair Powell, which have diminished the likelihood of a further 50 basis point rate cut by the Federal Reserve. This follows a significant decline in the USD/JPY during the summer, where it fell over 22 cents, largely due to the unwinding of carry trades. Last week, the pair saw a notable increase of 7 cents, bringing it closer to the 50% Fibonacci retracement level between the 162.00 and 139.50 dip, which sits above 151.
If buyers manage to surpass the 100-day simple moving average (SMA) at 149.50 and reach above 150, this will likely become the next target. In September, Japan’s profits and spending report indicated a slowdown in corporate profits, suggesting a reduced necessity for interest rate hikes. Despite year-over-year declines in spending, the data revealed improved consumer expenditure alongside moderate wage growth adjusted for inflation, which does not point toward aggressive monetary tightening.
Japan PPI Inflation Report for September
Monthly PPI Data:
- Japan’s Producer Price Index (PPI) was unchanged at 0.0% for September (m/m), outperforming expectations of a -0.3% decline.
- This follows a decline of -0.2% in August, indicating a stabilization in monthly producer prices.
Annual PPI Data:
- Year-over-year, the September PPI increased by +2.8%, higher than the forecasted +2.3%.
- This annual rise is also an uptick from August’s YoY growth of +2.5%, suggesting persistent inflationary pressures in the cost of goods at the producer level.
USD/JPY Live Chart
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