USD/JPY Price Analysis – March 01, 2023

Daily Price Outlook

The USD/JPY exchange rate is currently trading at $136.38, reflecting a 0.13% increase over the past 24 hours. Kazuo Ueda, a candidate for Governor of the Bank of Japan, has recently stated that monetary easing should continue to promote economic recovery. This suggests that if he is chosen to lead the central bank, there will not be a rapid shift in policy. Ueda has also expressed his commitment to "Abenomics" and support for the central bank's current stance on monetary policy.

Following Ueda's dovish remarks, BoJ Deputy Governor Ryozo Himino also expressed his support for the continuation of loose monetary policy to promote overall demand in the Japanese economy. However, he emphasized that there will come a time when it would be best to end the ultra-loose monetary policy.

These statements have put an end to rumors of a change in the Bank of Japan's monetary policy under the new administration, while still maintaining pressure on the yen relative to the dollar.

Fed rate hikes

The CB Consumer Confidence dropped from 106 in January to 102.9 in February, falling short of the expert prediction of 108.5. With traders awaiting the upcoming February business activity data on March 1st, recent statistics have shown growing inflation, prompting several FOMC members to stress the need for quick interest rate hikes to bring inflation down to the 2% objective. This has strengthened the Dollar, offsetting conflicting US data.

Currently trading at 104.85, the US Dollar Index (DXY) is rising and is expected to continue its upward momentum above 105.0. As further rate hikes are anticipated from the Federal Reserve to improve its capacity to fight high US inflation, market sentiment is rising, strengthening the pair.

USD/JPY Intraday Technical Levels

Support      Resistance

135.77         136.94

135.17         137.53

134.59         138.12

Pivot Point: 136.35

USD/JPY  – Technical Outlook

The USDJPY pair experienced a temporary downward bounce after approaching the 137.00 barrier yesterday. This was due to stochastic negativity, which is now beginning to provide new positive signals. As a result, it is expected to push the price to resume the bullish wave that is moving in an organized manner inside the bullish channel on the chart. It should be noted that the next target for the pair is located at 137.70.

To support this bullish wave, the EMA50 is continuing to provide support. However, it is important to maintain a hold above the 135.40 level, as breaking below it would stop the positive scenario and lead to a test of the 133.30 areas initially.

The USD/JPY pair is currently receiving immediate support at the 135.500 level and is gaining further support near the 134.150 level. If it breaks below this level, the next support area is around 134.450, which acted as support on February 23, 2023.

On the upside, the USD/JPY currency pair's immediate resistance prevails at the $136.300 level, and a bullish breakout above this level could expose the USD/JPY price to the 136.850 level.