Daily Price Outlook

During the Asian trading session on Thursday, the USD/JPY currency pair continued its upward movement, reaching levels not seen since November 2022, trading within the range of 147.80 to 147.85. This uptrend is primarily attributed to the strength of the US dollar, which is currently near its highest point in six months. However, the driving factor behind this strength is the growing anticipation of further interest rate hikes by the Federal Reserve.

On the other side, there are concerns about potential currency intervention by Japanese authorities, and overall market sentiment remains cautious. This caution is leading investors to seek the safety of the Japanese yen (JPY), acting as a safe-haven currency. As a result, the substantial advances in the USD/JPY pair are somewhat limited.

Strong US Economic Data Boosts USD/JPY Pair

The broad-based US dollar is gaining traction and remained strong, reaching a six-month peak following the release of encouraging US economic data. This robust performance is notably boosting the USD/JPY pair. The US Institute for Supply Management (ISM) Services Purchasing Managers' Index (PMI) for August exceeded even the most optimistic predictions, surging to 54.5, marking the highest level since February. A deeper look into the report reveals an increase in new orders and businesses reporting higher prices, indicative of a resilient US economy and persistent inflation pressures.

These developments have boosted the prospect of the Federal Reserve (Fed) implementing an interest rate hike in November. Hence, the expectation that the Fed will maintain higher rates for an extended period is underpinning elevated US Treasury bond yields and providing further support to the US dollar and contributes to the USDJPY pair gains.

JPY Underperforms Due to BoJ's Dovish Stance and Intervention Fears

Across the ocean, the Japanese Yen (JPY) is struggling due to the Bank of Japan's (BoJ) persistent commitment to loose monetary policies, which discourages bullish positions on the USD/JPY pair. There's also concern that Japanese authorities might intervene in the forex markets to strengthen the JPY. Japan's top currency diplomat, Masato Kanda, issued a warning about the JPY's depreciation and the possibility of measures against speculative activities.

This, along with a cautious equity market sentiment, boosts the JPY's safe-haven appeal and limits USD/JPY pair gains. In the meantime, investors seems worried about rising borrowing costs and a slowdown in China, reducing appetite for riskier assets.

USD/JPY - Technical Analysis

The USD/JPY pair encountered a brief downtrend, touching the 147.00 barrier, before regaining momentum in an attempt to continue its anticipated bullish trajectory in both the intraday and short-term scopes.

The positive forecast remains grounded, bolstered by the EMA50 which underpins the price. It's essential to note that a breach of the 146.55 level might instigate a temporary bearish correction before the price ascends once more.

For today, the projected trading spectrum is demarcated between the support at 147.00 and the resistance at 148.40

Daily Price Outlook

The USD/JPY currency pair continued its upward trajectory for the third consecutive day on Tuesday, maintaining its positive stance. During the early European session, the pair surged above the mid-146.00s, presently hovering near 146.72, marking a 0.16% gain for the day. Several key factors contributed to this upward momentum. Firstly, Japanese Household Spending witnessed a significant decline, which weighed on the Japanese yen's strength, thereby bolstering the US dollar's position.

Secondly, the mixed US employment data created a sense of uncertainty regarding the Federal Reserve's tightening policy, causing market participants to revise their expectations. Thirdly, upbeat manufacturing PMI data added to the dollar's strength, further supporting the USD/JPY pair.

Investors are now anticipating coming economic releases, including US Factory Orders, US ISM Services PMI, and Japanese Gross Domestic Product (GDP), which may provide additional insights into the currency pair's future movements.

Positive Impact of Weak Japanese Household Spending on USD/JPY Pair

According to recent data, Japanese household spending experienced its sharpest decline in almost two and a half years, with a 5.0% year-on-year drop in July, surpassing the expected 2.5% decrease. This marked the sixth consecutive month of decline. Meanwhile, Japanese Monetary Base data for August showed a 1.2% year-on-year increase, a shift from the previous 1.3% drop.

However, the Bank of Japan (BOJ) is maintaining its loose monetary policy and moving away from yield curve control, with BOJ Board member Toyoaki Nakamura emphasizing the need for more time before considering monetary tightening. However, the divergence in monetary policies between the US and Japan may limit potential downsides for the USD/JPY pair.

Japanese Finance Minister Shunichi Suzuki mentioned that while sudden currency fluctuations are undesirable, there is no current sign of market intervention to support the weakening yen, although they will closely monitor currency movements. Hence, Japan's weak household spending and the BOJ's loose monetary policy have positively impacted the USD/JPY currency pair, contributing to its ongoing rise, supported by policy divergence and a lack of yen-supportive interventions.

Impact on USD/JPY Pair Amid Mixed Economic Data

Apart from this, the mixed US economic data from last week has led to expectations of a more cautious stance from the Federal Reserve (Fed), which is affecting the USD/JPY pair. The CME FedWatch Tool indicates a 93% likelihood that interest rates will remain unchanged in September, with a 38% chance of a rate hike in November.

However, August's Nonfarm Payrolls exceeded expectations at 187K, but the Unemployment Rate dropped to 3.8%. US Manufacturing PMI also outperformed predictions at 47.6. Today, the US dollar's gains are limited as Wall Street observes Labor Day.

USD/JPY - Technical Analysis

The USD/JPY pair has opened today's trading session on an upbeat note, successfully surpassing the 146.55 mark and making endeavors to consolidate above this level. This movement suggests a potential cessation of the recent bearish correction, with the pair positioning to realign with its prevailing bullish trajectory. The anticipated upward targets are set initially at 147.55, progressing to 148.40 as a subsequent focal point.

The EMA50 underpins the pair, bolstering the bullish perspective. This optimistic outlook will persist unless there's a decline below the 146.55 level, further intensified by a drop beneath the 145.95 threshold. For the day, the trading range is projected between a support at 146.10 and resistance at 147.60.

Daily Price Outlook

The USD/JPY pair has opened today's trading session on an upbeat note, successfully surpassing the 146.55 mark and making endeavors to consolidate above this level. This movement suggests a potential cessation of the recent bearish correction, with the pair positioning to realign with its prevailing bullish trajectory. The anticipated upward targets are set initially at 147.55, progressing to 148.40 as a subsequent focal point.

The EMA50 underpins the pair, bolstering the bullish perspective. This optimistic outlook will persist unless there's a decline below the 146.55 level, further intensified by a drop beneath the 145.95 threshold. For the day, the trading range is projected between a support at 146.10 and resistance at 147.60.

USD/JPY - Trade Idea

Entry Price – Buy Above 146.626

Take Profit – 147.950

Stop Loss – 145.835

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$132/ -$79

Profit & Loss Per Micro Lot = +$13/ -$7

Daily Price Outlook

The USD/JPY pair has successfully breached the 145.75 mark and maintained its stance beneath this level, bolstering the anticipated bearish inclination on an intraday scale. The trajectory suggests a potential movement towards our primary target set at 144.55.

Current dynamics, underscored by the negative pressure exerted by the EMA50, fortify the likelihood of reaching the projected target. However, it's pivotal to underscore that for the bearish momentum to persist, the pair needs to remain anchored below the 146.55 benchmark.

Today's trading spectrum is delineated between a support threshold at 144.60 and resistance positioned at 146.00, with the prevailing sentiment skewed towards the bearish side.

USD/JPY - Trade Idea

Entry Price – Sell Below 145.706

Take Profit – 144.968

Stop Loss – 146.273

Risk to Reward – 1: 1.3

Profit & Loss Per Standard Lot = +$738/ -$567

Profit & Loss Per Micro Lot = +$73/ -$56

Daily Price Outlook

The USD/JPY pair made an attempt to breach the 146.55 level yesterday; however, it encountered a strong downward reversal, ultimately reaching our initial awaited target at 145.75. At this point, it discovered significant support, setting the stage for a potential break of this level. Such a breach would serve as confirmation for the continuation of the prevailing bearish bias, guiding the price towards the subsequent downside target at 144.55.

Consequently, our stance maintains the bearish outlook for the forthcoming period. It's important to highlight that surpassing the 146.55 level would halt the projected decline and propel the price back into the realm of the primary bullish trajectory. The projected trading range for today is expected to fluctuate between the support level at 145.40 and the resistance at 146.95.

USD/JPY - Trade Idea

Entry Price – Buy Above 145.738

Take Profit – 147.339

Stop Loss – 145.117

Risk to Reward – 1: 1.2.5

Profit & Loss Per Standard Lot = +$1601/ -$621

Profit & Loss Per Micro Lot = +$160/ -$62

Daily Price Outlook

The USD/JPY currency pair has suceeded to extend its upward stance and risen to around 146.00 in early European trading, recovering from recent losses. However, this upward trend is partly due to mixed inflation data in Japan, which is keeping the Japanese Yen (JPY) under pressure. Furthermore, the JPY is facing concerns of immediate government intervention and a more dovish stance from the Bank of Japan (BoJ).

Apart from this, the USD/JPY pair has been boosted by strong US employment data, higher US Treasury yields, and uncertainty surrounding the US Federal Reserve's September policy tightening. These factors collectively contribute to the recent strength in the USD/JPY pair.

Tokyo's Lower-than-Expected Inflation and Its Impact on USD/JPY

According to recent data, consumer prices in Tokyo, Japan, rose less than anticipated in August. The Tokyo Consumer Price Index (CPI) grew by 2.9% annually, falling short of the expected 3.0% and down from 3.2% in the previous report. Meanwhile, Tokyo CPI ex Food, Energy (YoY) remained consistent at 4% whereas Tokyo CPI ex Fresh Food (YoY) declined to 2.8% against the market consensus of 2.9%. The index printed the 3% figure in July.

The lower-than-expected consumer price growth in Tokyo could weaken the Japanese yen. If inflation continues to lag, it may prompt the Bank of Japan to maintain its accommodative policies, potentially leading to a stronger USD/JPY pair as the US dollar gains relative strength.

Factors Pressuring Japanese Yen (JPY) and Impact on USD/JPY Pair

Moreover, the Japanese Yen remains under pressure due to the Bank of Japan's (BoJ) more cautious approach. The BoJ stands alone among central banks with its negative interest rates policy. Policymakers also stress the need for sustainable wage increases before they'll consider scaling back their substantial monetary support. These factors weigh on the USD/JPY pair, potentially favoring the US dollar.

USD Strength Spurs USD/JPY Pair Amid Fed and BoJ Influences

The broad-based US dollar regained its strength and rose sharply on the day. The US dollar, measured by the US Dollar Index (DXY), is currently around 104.20 before Fed Chair Powell’s speech. Meanwhile, the USD/JPY pair was also influenced by Bank of Japan (BoJ) Governor Kazuo Ueda’s upcoming speech at the Jackson Hole Symposium. Whereas, the strong US jobless claims data and mixed sentiment about US Federal Reserve policy support the USD/JPY rise. Plus, the pair benefits from higher US Treasury yields and concerns about China's economy affecting export ties with the US. This blend of factors contributes to the USD/JPY pair's recent strength.

USD/JPY - Technical analysis

The USD/JPY pair experienced a notable upward surge in the previous session, surpassing the 145.00 mark and currently reaching the 146.00 barrier. This movement has effectively halted the corrective bearish scenario, revitalizing the prospect of the primary bullish trend. The focus now shifts towards testing the recently established peak at 146.55, marking a forthcoming target. It is worth highlighting that a successful breach of this level would propel the price further, aiming for extended gains at 147.00 followed by 147.90.

Hence, the prevailing sentiment remains inclined towards a bullish bias today. However, it's crucial to acknowledge that a failure to surpass the 146.25 threshold could prompt a decline. This scenario could materialize after the formation of a third lower high, potentially guiding the price back to the corrective bearish trajectory.

The projected trading range for the current session is bounded by the support level at 145.30 and the resistance at 147.00.

Overall, the anticipated trend for today is bullish, but bearish below 146.500. 

Daily Price Outlook

The USD/JPY pair experienced a notable upward surge in the previous session, surpassing the 145.00 mark and currently reaching the 146.00 barrier. This movement has effectively halted the corrective bearish scenario, revitalizing the prospect of the primary bullish trend. The focus now shifts towards testing the recently established peak at 146.55, marking a forthcoming target. It is worth highlighting that a successful breach of this level would propel the price further, aiming for extended gains at 147.00 followed by 147.90.

Hence, the prevailing sentiment remains inclined towards a bullish bias today. However, it's crucial to acknowledge that a failure to surpass the 146.25 threshold could prompt a decline. This scenario could materialize after the formation of a third lower high, potentially guiding the price back to the corrective bearish trajectory.

The projected trading range for the current session is bounded by the support level at 145.30 and the resistance at 147.00.

Overall, the anticipated trend for today is bullish, but bearish below 146.500.

USD/JPY - Trade Idea

Entry Price – Sell Below 146.436

Take Profit – 145.524

Stop Loss – 146.836

Risk to Reward – 1: 2.2

Profit & Loss Per Standard Lot = +$912/ -$400

Profit & Loss Per Micro Lot = +$91/ -$40

Daily Price Outlook

The USD/JPY currency pair failed to prolong its upward rally and currently trades near 146.37 during the Asian trading hours on Tuesday. The recent foreign investor selling of Japanese Government Bonds (JGBs), could influence the USD/JPY currency pair. The central bank's actions to weaken the yen might push the pair higher.

Furthermore, the concerns about policy adjustments due to changes in Yield Curve Control (YCC) could add uncertainty, impacting the yen's value. As a result, the USD/JPY pair might see fluctuations as market players gauge the central bank's moves and investor sentiment evolves.

Impact of Rising Japanese Bond Yields on USD/JPY Currency Pair

Moreover, the recent improvement in Japan's growth and inflation numbers has led to higher yields on 10-year and 30-year Japanese Government Bonds (JGBs), reaching their highest levels since 2014 at around 0.66% and 1.66% respectively. This increase in bond yields is strengthening the market's belief that the Bank of Japan could be moving away from its very loose monetary policy, especially after adjusting the Yield Curve Control (YCC) policy.

As Japan's bond yields rise, the Yen may gain strength. A stronger Yen could potentially put downward pressure on the USD/JPY currency pair, as the US Dollar might weaken against the resilient Yen.

Factors Influencing USD/JPY Amidst Market Caution and Bond Yield Changes

In the meantime, the positive US data and concerns about the banking sector, along with China's economic recovery efforts falling short, create cautious market sentiment and boost bond yields. The Yen benefits as a safe haven. Also, a labor survey indicating high wage expectations contributes to the risk-off mood and stronger bond yields. These factors combined could weaken the USD/JPY currency pair, as the Yen gains strength amid market uncertainty and firmer bond rates.

Moving on, the upcoming US housing data, Japan's inflation figures, and policymakers' speeches will play a role in USD/JPY trading. Crucially, all eyes are on Fed Chair Jerome Powell's speech at the Jackson Symposium on Friday, which will heavily influence the currency pair's movement.

USD/JPY - Technical analysis

The USD/JPY currency pair experienced an upward surge in the previous trading session, following a breach of the bullish flag's resistance line highlighted in our previous analysis. This propelled the pair towards the awaited positive target at 146.55. It's worth noting that the price's positive momentum has waned as it embarks on the current trading day.

Notably, the stochastic indicator exhibits a negative overlap, thereby bolstering the likelihood of potential downturns in the forthcoming sessions. This outlook anticipates a decline towards the levels of 145.15 and subsequently 144.55, identified as the primary negative waypoints.

Given the prevailing circumstances, a bearish bias is to be anticipated for today's trading session. It's pertinent to acknowledge that a breakthrough above the 146.55 level could trigger a resumption of the primary bullish trend, facilitating further gains with a potential target of 147.00. The projected trading range for the day is foreseen to span between the support level at 145.00 and the resistance level at 146.55.

Daily Price Outlook

The USD/JPY currency pair is keeping its position around the mid-145.00s on Wednesday's Asian session. However, its upward momentum can be attributed to the robust US dollar, which gained strength from the impressive retail sales figures recently released. These numbers signal strong consumer spending and a boost to the overall economy. This positive outlook creates expectations of potential interest rate hikes by the Federal Reserve, enhancing the dollar's appeal to investors and potentially fortifying it further. All these factors are contributing to the gains seen in the USD/JPY currency pair.

USD Strength Continues Amidst Fed Confidence and Strong Retail Sales

The broad-based US dollar continues to build on its recent strong performance, reaching a peak not seen in over two months. This upswing is largely driven by the growing belief that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. This belief gained strength following positive news released on Tuesday.

Accordig to the latest data, Retail Sales for July surged by 0.7%, surpassing both the earlier revised 0.3% and the expected 0.4% increase. Notably, sales excluding automobiles saw an impressive 1% rise, marking the most substantial monthly growth since January. This highlights robust consumer spending and the remarkable resilience of the US economy, bolstering the Fed's hawkish stance. Consequently, this is lending support to the USD/JPY pair.

Factors Influencing USD/JPY Pair and Future Outlook

Moreover, worries about Japan stepping in to prevent their currency from dropping further are holding back the USD/JPY pair's upward movement. Meanwhile, the Bank of Japan's more dovish stance prevents the Japanese Yen from getting too strong. Also, the difference in interest rates between the US and Japan has grown, as people expect the Fed to raise rates by 0.25% more by year-end. This setup suggests that the USD/JPY pair might rise in the short term.

Looking forward, traders are keeping an eye on upcoming US economic reports like Building Permits, Housing Starts, and Industrial Production, which could affect the USD's movement and give direction to the USD/JPY pair. However, all eyes are on the FOMC meeting minutes, as they will strongly impact USD demand in the short term and guide the next move for this currency pair.

USD/JPY - Technical analysis

Yesterday, the USD/JPY pair showcased further positive momentum, inching closer to our anticipated target of 146.00. The pair remains buoyed above the bullish trend line, reinforcing prospects for continued upward movement in both intraday and short-term frames, with the next bullish milestone pegged at 146.80.

Consequently, forecasts suggest a continued bullish trajectory in the near future, bolstered by the EMA50 underpinning the price. However, it's worth noting that a dip below 145.00 could instigate a temporary bearish pullback before the pair resumes its upward climb. Today's trading is projected to oscillate between a support of 144.80 and resistance at 146.40.

Daily Price Outlook

The USD/JPY currency pair has eased its upward momentum and experienced a marginal loss of 0.03%. However, it has managed to recover some of these losses and has been influenced by notable developments shaping its recent movements. In the midst of these changes, the pair successfully regained the 143.30 level during the Asian session.

However, the Bank of Japan (BoJ) recently surprised the market by deciding to keep its very low-interest rates. They also changed how they control the yield curve, allowing the 10-year yield to go higher, as long as it stays below 1.0% instead of the old limit of 0.5%. This shows that the BoJ is focused on keeping a policy that helps the economy. BoJ Deputy Governor Shinichi Uchida also said that having an easy policy is really important to make sure Japan's economy stays stable.

Hence, the BoJ's unexpected decision to maintain low rates and adjust its yield curve strategy could influence the USD/JPY pair. It might impact the yen's strength and the pair's overall movement.

On the flip side, the US economy is sending mixed signals as July's ISM Manufacturing PMI improved slightly to 46.4, it didn't meet expectations, indicating ongoing challenges in the manufacturing sector. Furthermore, in June, the number of job openings (JOLTS) decreased to 9.58 million, raising concerns about the job market.

These economic indicators might affect the Federal Reserve's approach to policies, leading them to be cautious. Consequently, the US Dollar could strengthen, potentially causing the USD/JPY pair to rise.

Upcoming Focus and Future Outlook

Looking forward, traders are awaiting the US ADP Employment Change report, which will likely influence the overall risk sentiment for the USD/JPY pair. However, all eyes are on the US monthly employment report, known as the NFP report, which is sure to capture the market's attention.

USD/JPY - Technical Analysis

The USD/JPY pair has shown a sustained upward trend in early trading today, supported by the short-term upward correctional trend and the presence of a trend line. Additionally, trading above the 50-day SMA and positive signals from the RSI, despite reaching overbought levels, have further bolstered the bullish sentiment.

Considering these factors, we anticipate that the USD/JPY pair will continue to gain momentum, with the next key target being the pivotal resistance level of 145.00.

Our price prediction for today suggests a trading range between the support level of 141.50 and the resistance level of 145.00, indicating potential opportunities for bullish moves.

Traders are advised to closely monitor the price action and consider the bullish trend in their trading strategies for the USD/JPY pair. However, it is essential to exercise caution and implement risk management practices, given the dynamic nature of the market.