USD/JPY

Welcome to another edition of Forex Friday, a weekly report in which we highlight selected currency themes. In this week’s report, we will discuss the Japanese yen, US dollar and look ahead to the next week.

Diverging interest rate expectations between the Federal Reserve and the rest of the developed world have been THE biggest story of the year for FX traders (USD/JPY in particular), and Friday’s Core PCE report will be the next major test to determine if that trend will carry over into Q2

DAX rises with German IFO business sentiment data in focus. USD/JPY inches higher despite intervention threats and ahead of US durable goods orders.

US GDP, Core PCE and BoJ policy are among the risk events this week for the USD/JPY currency pair, as the focus turns to sticky inflation and elevated interest rates narrative from Middle East concerns for now. USD/JPY technical analysis point to a potential rally above 155.00.

US dollar analysis: Focus turns to sticky inflation and elevated interest rates narrative as markets regain their poise – for now – as Iran downplays the impact of Israel's strikes. The EUR/USD and USD/JPY will be in sharp focus with global PMIs and BoJ policy among other risk events coming up next week.

155 has become the latest 'glass ceiling' for the rapid rise of USD/JPY. And with a key US inflation report, BOJ meeting and potential for risk-off sentiment next week, this key level could be tested and prompt a response from Japan's central authorities.

USD/JPY upside looks limited in the near-term, hindered by narrowing interest rate differentials and perceived increased risk of Bank of Japan intervention. The stronger yen may add to growing downside momentum in the Nikkei 225, putting two of the strongest market trends in 2024 under threat.

For USD/JPY, the next test to watch will be at 155.00, and if the MOF/BOJ fail to act if USD/JPY breaches that level, traders may start to turn their eyes up to 160.00 next

USD/JPY looks to US CPI data, FTSE shrugs off China’s credit rating downgrade.

USD/JPY sits in a narrow trading range, sandwiched by bullish fundamentals and threat of intervention from the Bank of Japan to support the yen. The latter has reduced the odds of near-term upside for USD/JPY despite the release of important inflation updates in the United States this week.

Forget focusing on the payrolls figure in the US jobs report. It’s not as important as it’s made out to be. Traders would be better off looking at unemployment and average hourly earnings data if they want to know how markets are likely to react.

US dollar drops against most currencies expect JPY, but when will Japan intervene? USD/JPY technical analysis suggests rates still gearing up for a potential breakout above 142.00 handle.

Data since the Pandemic shows that NFP job growth has generally outperformed estimates and seen the prior figure upwards revised, which has played out well for US dollar bulls.

With the threat of BOJ intervention elevated and seemingly increasing, buying USD/JPY right now screens as high risk and low reward. Selling rallies ahead of 152 looks a far stronger trade setup, especially when you consider how significant the US rates repricing has already been this year.

Welcome to another edition of Technical Tuesday, a weekly report where we highlight some of the most interesting markets that will hopefully appease technical analysts and traders alike. In this week’s report, we will get technical on the USD/JPY, which remains supported by rising bond yields and crude oil prices, as investors await NFP among key data highlights from the US this week.

A stronger-than-expected ISM manufacturing report sent the US yield curve and the dollar higher, sending USD/JPY within reach of 152 and AUD/USD lower.

The threat of intervention from the BOJ has increased, likely limiting upside for USD/JPY in the near to medium-term. But extremely wide interest rate differentials and buoyant markets suggest it shouldn’t be significantly lower. It points to a stalemate for yen bulls and bears but opens the door for traders to play existing ranges.