Daily Price Outlook

During early European trading on Thursday, the USD/JPY pair surged above the 148.00 mark, bouncing back from its low of 147.47. However, the reason for its upward movement was mainly fueled by the Federal Reserve's (Fed) hawkish stance in the Wednesday's policy meeting. Besides this, traders seems cautious to place any strong position due to verbal intervention from Japanese authorities earlier in the week. Although the USD is showing strength, these interventions may impact its further rise against the Japanese Yen.

Fed's Steady Rates and "Higher for Longer" Outlook

As we mentioned above, the Federal Reserve held steady on interest rates at their September meeting, maintaining them at 5.25-5.50%. They are growing more confident about taming inflation without harming the economy or causing major job losses. According to their latest quarterly forecasts, there might be one more rate hike this year, bringing the range to 5.50% to 5.75%. Furthermore, they expect rates to remain quite high through 2024, more than previously thought.

Moreover, the Fed updated its Summary of Projections (SEP), showing that they anticipate the interest rate hitting 5.1% by the end of 2024, up from the previous estimate of 4.6%. Hence, this "higher for longer" rate outlook has given the US Dollar a boost against other currencies.

Market Highlights: Upcoming Events and Potential USD/JPY Opportunities

Besides this, the highlight for Friday is the Bank of Japan (BoJ) interest rate decision. It is worth noting that the BoJ is expected to stick with its -0.1% short-term interest rate target and its 10-year bond yield target at around 0%. They have made it clear that they will not consider changes to monetary policy until local wage and inflation data align with their projections.

Meanwhile, traders are being careful because they're concerned about verbal interventions. A former top currency diplomat, Takehiko Nakao, told Reuters that Japanese authorities might step in to help the yen if it gets weaker. Japan's top currency diplomat, Masato Kanda, has also stressed the need to act quickly regarding currency movements. As a result, the Japanese Yen (JPY) is under pressure to weaken, which is good for the USD/JPY pair.

Looking forward, investors will keep their eyes on upcoming events. Notably, thursday will bringsome key economic data, such as US weekly Jobless Claims, the Philly Fed report, and Existing Home Sales. On Friday, all attention will be on the Bank of Japan's (BoJ) meeting decision. Traders will closely watch these events for potential trading opportunities involving the USD/JPY pair.

USD/JPY - Technical Analysis

The USD/JPY pair has successfully breached the 147.86 mark and established a daily close above it, enhancing the prospects for sustained bullish momentum in forthcoming sessions. We anticipate a continued upward trajectory, targeting the 149.00 level as our subsequent milestone.

The bullish outlook is further corroborated by the EMA50, which underpins the price, coupled with the favorable convergence signal currently exhibited by the stochastic indicator. It is imperative to maintain a position above the 147.50 level to realize the projected targets.

For today's trading dynamics, we forecast a range defined by a support at 147.60 and a resistance at 149.10, with the prevailing sentiment tilting bullish.

Daily Price Outlook

The USD/JPY pair has successfully breached the 147.86 mark and established a daily close above it, enhancing the prospects for sustained bullish momentum in forthcoming sessions. We anticipate a continued upward trajectory, targeting the 149.00 level as our subsequent milestone.

The bullish outlook is further corroborated by the EMA50, which underpins the price, coupled with the favorable convergence signal currently exhibited by the stochastic indicator. It is imperative to maintain a position above the 147.50 level to realize the projected targets.

For today's trading dynamics, we forecast a range defined by a support at 147.60 and a resistance at 149.10, with the prevailing sentiment tilting bullish.

USD/JPY - Trade Idea 

Entry Price – Buy Limit 148

Take Profit – 149.040

Stop Loss – 147.350

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$1040/ -$650

Profit & Loss Per Micro Lot = +$104/ -$65

Daily Price Outlook

The USD/JPY pair demonstrates consistent movement around the 147.86 mark, encountering challenges in surpassing it. Notably, the stochastic oscillator is now exhibiting a positive convergence, potentially propelling the pair to breach the aforementioned level and aim for our subsequent target at 149.00.

The prevailing bullish channel underpins the anticipated upward trajectory, contingent upon the price's ability to remain stable above the 147.30 threshold. For today, we project a trading range between the support level of 147.00 and a resistance at 148.70.

USD/JPY - Trade Idea 

Entry Price – Buy Stop 148.000

Take Profit – 149.040

Stop Loss – 147.286

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$1040/ -$714

Profit & Loss Per Micro Lot = +$104/ -$71

Daily Price Outlook

The USD/JPY currency pair witnessed some buying interest on Tuesday but has been struggling to make significant gains. It is currently trading around 147.70, up just slightly for the day. Notably, the pair reached its highest level since November 2022 last week but has not been able to maintain that momentum.

However, traders seems cautious and staying on the sidelines as they await important central bank events this week, particularly the Federal Reserve (FOMC) and the Bank of Japan (BoJ) rate decisions. These events are seen as crucial, and investors are holding off on making big moves until they have more clarity on central bank policies.

At the time of writing, the USD/JPY currency pair is trading at 147.68 level and consolidating in the range between 147.50 - 147.93.

Fed Expected to Maintain Cautious Stance: Impact on USD/JPY

It's worth noting that the Federal Reserve is set to announce its decision on Wednesday, and most people expect them to keep things as they are. However, the market believes that the Fed will stick to its more cautious approach, keeping interest rates relatively high for an extended period. This expectation is keeping US Treasury bond yields up, which, in turn, is helping the US Dollar (USD) stay strong. As a result, the USD/JPY pair is benefiting, with the USD holding its ground after a recent dip from a six-month high. This all suggests ongoing support for the USD/JPY currency pair.

USD/JPY Traders Cautious Amid BoJ Speculation

Another factor affecting the USD/JPY currency pair's gains is the speculation surrounding a potential shift in the Bank of Japan's (BoJ) dovish stance. BoJ Governor Kazuo Ueda recently hinted in an interview with Yomiuri newspaper that they might consider ending their negative interest rate policy if they become confident that prices and wages will continue rising steadily. This statement has raised expectations that the BoJ could gradually move away from its ultra-loose monetary policy, creating uncertainty in the market and causing some traders to hold back on placing bullish bets on the USD/JPY pair.

Looking forward, all eyes are on the Bank of Japan (BoJ) policy meeting set for Friday. Investors await signals about the BoJ's plans regarding its negative interest rate policy, which could significantly impact the Japanese Yen and reshape the direction of the USD/JPY currency pair. Moreover, US housing market data like Building Permits and Housing Starts will also offer short-term trading opportunities.

USD/JPY - Technical Analysis

The USD/JPY pair demonstrates consistent movement around the 147.86 mark, encountering challenges in surpassing it. Notably, the stochastic oscillator is now exhibiting a positive convergence, potentially propelling the pair to breach the aforementioned level and aim for our subsequent target at 149.00.

The prevailing bullish channel underpins the anticipated upward trajectory, contingent upon the price's ability to remain stable above the 147.30 threshold. For today, we project a trading range between the support level of 147.00 and a resistance at 148.70.

Daily Price Outlook

The USD/JPY pair has decisively surpassed the 146.90 threshold, signaling a resurgence of the primary bullish trajectory. This movement is in line with the bullish channel delineated on the chart, enhancing the probability of eclipsing the recent peak of 147.86 and steering towards the 149.00 region as the forthcoming key target.

The 50-day Exponential Moving Average (EMA50) lends positive reinforcement to the pair, underscoring the anticipated upward trend in subsequent sessions. However, it's crucial to note that a breach below the 146.90 mark, followed by a drop past 146.35, could thwart the projected ascent and redirect the pair back to a corrective bearish path.

For today, the trading spectrum is projected to oscillate between a support at 146.70 and resistance at 148.20.

USD/JPY - Trade Idea 

Entry Price – Buy Limit 146.677

Take Profit – 147.955

Stop Loss – 145.774

Risk to Reward – 1: 1.4

Profit & Loss Per Standard Lot = +$1278/ -$903

Profit & Loss Per Micro Lot = +$127/ -$90

Daily Price Outlook

During the Asian session on Thursday, the USD/JPY pair faced selling pressure, breaking its two-day winning streak and sliding to around 147.75 after hitting a weekly high. However, the decline can be attributed to expectations that the Bank of Japan (BoJ) will shift away from its ultra-easy monetary policy, boosting the Japanese Yen (JPY) and weighing on the pair. Furthermore, the ongoing uncertainty surrounding the Federal Reserve's rate-hike plans is leading to US Dollar selling, further contributing to the pair's downward movement.

BoJ Policy Shift Boosts JPY Strength

It is important to note that the Japanese Yen is gaining strength due to expectations that the Bank of Japan (BoJ) will move away from its super-easy monetary policy. This is putting pressure on the USD/JPY currency pair. It should be noted that people in the market are now thinking that the central bank might stop its policy of controlling interest rates and negative rates as early as this year. This came after the BoJ Governor Kazuo Ueda's comments over the weekend. He hinted that they might raise interest rates if they're confident that prices and wages will keep rising. This caused Japanese government bond yields to go up, supporting the JPY and contributing the USD/JPY currency pair.

Market Uncertainty Impacts USD/JPY Pair

Across the ocean, the ongoing uncertainty about the Federal Reserve's future interest rate hikes is causing some US Dollar selling, which is affecting the USD/JPY pair. However, the recent US consumer inflation data suggests the Fed will keep rates steady at its upcoming meeting. Notably, inflation remains a concern, leaving the possibility of another rate increase by year-end. Market pricing suggests a greater than 50% chance of a 0.25% rate hike in either November or December. This could stop USD bears from aggressive selling and help limit losses for the USD/JPY pair.

Looking forward, traders will keep thier eyes on key US economic reports, including Weekly Jobless Claims, the Producer Price Index (PPI), and monthly Retail Sales. These releases could provide new momentum for the USD/JPY currency pair.

USD/JPY - Technical Analysis

The USD/JPY pair has decisively surpassed the 146.90 threshold, signaling a resurgence of the primary bullish trajectory. This movement is in line with the bullish channel delineated on the chart, enhancing the probability of eclipsing the recent peak of 147.86 and steering towards the 149.00 region as the forthcoming key target.

The 50-day Exponential Moving Average (EMA50) lends positive reinforcement to the pair, underscoring the anticipated upward trend in subsequent sessions. However, it's crucial to note that a breach below the 146.90 mark, followed by a drop past 146.35, could thwart the projected ascent and redirect the pair back to a corrective bearish path.

For today, the trading spectrum is projected to oscillate between a support at 146.70 and resistance at 148.20.

Daily Price Outlook

The USD/JPY currency pair extended its upward rally and attracted more buying interest, pushing it above the recent levels. However, this rally can be linked to the increased demand for the US Dollar, which is providing strong support to the USD/JPY pair. It's worth noting that the upward movement is mainly driven by the emergence of USD buying, acting as a significant tailwind for the pair. Across the ocean, the worries about intervention and a cautious market mood support the Japanese yen (JPY) and limit gains for the USD/JPY pair.

USD/JPY Reacts to BoJ Governor's Comments and Policy Outlook

The USD/JPY pair initially reacted positively to Bank of Japan (BoJ) Governor Kazuo Ueda's hawkish comments, but this optimism faded quickly. Many in the market believe that the Japanese central bank will maintain its current policies until next summer. Ueda mentioned the option of ending negative interest rates if he's confident in rising prices and wages. However, Hiroshige Seko of Japan's ruling party prefers loose monetary policies. Seko noted that Ueda believes policy changes will only happen after reaching the 2% inflation target. This eases concerns about an immediate BoJ policy shift, and, coupled with some US Dollar (USD) buying, supports the USD/JPY pair.

Factors Influencing USD/JPY Pair's Direction

Apart from this, the Federal Reserve's potential future tightening of policies is boosting US Treasury bond yields and increasing demand for the US dollar (USD). Although the Fed is expected to pause its rate hikes in September, markets still think there might be one more 25 bps increase in 2023. The strong US economic data and persistent inflation suggest the Fed may maintain higher interest rates. Moving on, the upcoming US CPI report on Wednesday will be closely watched for clues on the Fed's future rate hike plans, influencing the USD/JPY pair's near-term direction.

Hence, this news is likely to exert upward pressure on the USD/JPY currency pair. The Federal Reserve's potential tightening of policies, coupled with expectations of another rate increase in 2023, is boosting demand for the US dollar (USD). (edited)

USD/JPY - Technical Analysis

The USD/JPY pair exhibited pronounced bearish activity yesterday, breaking through the 146.55 mark to touch 145.90. However, it has since oscillated around the initial level, influenced by the fading positive momentum of the stochastic indicator. Additionally, the EMA50 exerts downward pressure on the price.

Given these dynamics, we are inclined to forecast continued bearish tendencies in forthcoming sessions. It's imperative to note that our subsequent primary target stands at 145.55. Any breach beyond 146.90 would negate the anticipated decline, potentially realigning the pair with its primary bullish trajectory. Today, we project a trading range between a support level of 145.80 and resistance at 147.40.

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 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

USD/JPY - Trade Idea

Entry Price – Buy Above 147.030

Take Profit – 149.144

Stop Loss – 145.713

Risk to Reward – 1: 1.6

Profit & Loss Per Standard Lot = +$211/ -$131

Profit & Loss Per Micro Lot = +$21/ -$13

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.