Market News

Japanese Yen Falls as BOJ Maintains Status Quo: USD/JPY Eyes 150

The Japanese Yen falls amid the BOJ’s unwavering policy stance. USD/JPY nears the 152.00 high amid persistent inflationary pressures.

  • The Japanese yen weakens as the Bank of Japan (BOJ) maintains ultra-loose monetary policies.
  • The BOJ refrains from policy changes, awaiting stronger evidence of sustained price pressures.
  • Japan’s core inflation exceeds the 2% target, fueling speculation about ending negative interest rates.

Japanese Yen Falls as BOJ Maintains Status Quo USD/JPY Eyes 150

The Japanese yen faced a significant decline against the US dollar following the Bank of Japan’s (BOJ) decision to retain its ultra-loose monetary policies. The BOJ opted to maintain the target at around 0% and a cap of 1.0% for the 10-year bond yield.

As widely anticipated, the Japanese central bank kept its policy settings unchanged during the two-day meeting. Policymakers are awaiting further evidence of sustained price pressures before making any adjustments. All eyes are now on Governor Kazuo Ueda’s briefing for hints about the timing of a potential policy shift. In a recent interview, Ueda suggested that by year-end, the central bank would have sufficient data to evaluate whether to end negative rates, sparking speculation of an early departure from the current policy stance.

With inflation consistently surpassing the central bank’s 2% target, it may only be a matter of time before the BOJ eases its ultra-loose monetary stance. Recent data revealed that Japan’s core inflation rose to 3.1% year-on-year in August, exceeding expectations. Many market participants now believe that the BOJ may phase out its negative interest rates policy next year.

USD/JPY’s Three-Decade High and Technical Analysis

The BOJ’s move in July, which allowed greater flexibility in long-term rates, was seen as a step toward exiting current policy settings. Since then, Japan’s 10-year government bond yield has surged to levels not seen in a decade, aligning with rising yields worldwide as central banks maintain a hawkish stance amidst persistent inflationary pressures.

The divergence in monetary policy between Japan and its counterparts has propelled USD/JPY toward the three-decade high of 152.00 reached in 2022. This level had previously triggered currency market interventions last year, leading to recent verbal interventions by Japanese authorities. While intervention could temporarily curb JPY’s weakness, a sustained JPY strength would require Japan to abandon its ultra-loose monetary policies and/or retreat from hawkishness by other central banks.

From a technical standpoint, while the recent uptrend has slowed, it remains intact. Even on intraday charts, USD/JPY continues to stay above crucial support levels. For instance, on the 240-minute charts, USD/JPY has remained above the 200-period moving average since July. A breach below this moving average, coinciding with the mid-September low of 146.00, would serve as a warning sign of a potential shift in the two-month-long uptrend. A drop below the early-September low of 144.50 could jeopardize the bullish bias.

On the upside, USD/JPY faces a strong resistance level at the 2022 high of 152.00. Beyond 152.00, the next key level to monitor is the 1990 high of 160.35.

Stay Updated with the Latest Market News. Visit our YouTube Channel for the Latest Forex Analysis.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Newsletter

Subscribe to ForexPropNews Trading Newsletters

Receive the best-curated content by our editors for the week ahead.

Mini Charts

Related Articles

Asia-Pacific Markets Dip on Tech Earnings and Economic Data

Asian markets fell as U.S. tech earnings disappointed. The Nikkei dropped 1.27%,...

Asian Stock Diverge as Wall Street Sees Strong Rebound

Asia-Pacific markets were mixed as Wall Street rebounded. Taiwan's Taiex surged 2.4%,...

Dollar Steady; Gold and Oil Prices Face Challenges: Market Focus

Quiet start to the week with no major news. DXY steadying around...

Profit-Taking and Tech Sector Weakness Drive Down Asia-Pacific Markets

Asia-Pacific markets declined on Friday, reflecting Wall Street’s tech stock sell-off. Japan’s...

Featured educational content

EXPLORE MORE

Featured educational content

New to Forex? Learn to Read Charts Like a Pro

Dive into forex trading basics: chart reading, candlesticks, technical indicators, timeframes, currency pairs. Start your journey to trading success today!

Video: How I Re-Programmed My Mind to be a Consistent Trader (Thanks to The Wolf of Wall Street)

How I Re-Programmed My Mind to be a Killer Trader (Thanks to The Wolf of Wall Street)

Video: This Invisible Trading Indicator Tells you What Day Trade (Not Just Price)

This Invisible Trading Indicator Tells you WHEN to Trade (Not Just Where)

Technical Analysis: Chart Patterns and Indicators for Profitable Investments

Navigate stocks with confidence using chart patterns like Head and Shoulders, indicators such as MACD, and tools like trendlines. Master technical analysis for...

Latest News

Asia-Pacific Markets Dip on Tech Earnings and Economic Data
Market News

Asia-Pacific Markets Dip on Tech Earnings and Economic Data

Asian markets fell as U.S. tech earnings disappointed. The Nikkei dropped 1.27%, Hang Seng down 0.83%, and EV stocks fell.

Asian Stock Diverge as Wall Street Sees Strong Rebound
Market News

Asian Stock Diverge as Wall Street Sees Strong Rebound

Asia-Pacific markets were mixed as Wall Street rebounded. Taiwan's Taiex surged 2.4%, while China's CSI 300 fell 1%.

Copyright © 2023 Forex Prop News. All Rights Reserved.