- At the beginning of this week, the Japanese Yen declined below 150.80 yen per US dollar, the highest level for the currency pair in more than two months.
- With the recent performance, the USD/JPY pair is returning to the key psychological level of 150 yen per dollar, which markets fear may prompt Japanese authorities to intervene again in the forex market.
- In late last week, the Yen reached its 11-week low at 150.32 yen as the US dollar rose on the back of strong US economic data and increased odds of a Trump presidency again. Also, data released on Friday showed that Japan’s core and headline inflation rates slowed to a five-month low of 2.5% and 2.4%, respectively, in September.
Overall, the weakness of the yen prompted Japan’s top currency diplomat Atsushi Mimura to reiterate government warnings that it is closely monitoring the currency’s movements, and that excessive volatility is undesirable. Japanese authorities intervened in forex markets earlier this year when the yen breached the 160-yen-per-dollar level, with markets watching 150 as a potential new line in the sand.
Elsewhere, Japan’s 10-year bond yield fell amid safe-haven demand. According to trade, the 10-year Japanese government bond yield fell to around 0.95% on Monday as political uncertainty ahead of the country’s general election this week spurred safe-haven demand for Japanese government bonds. Tensions over the US presidential election and rising geopolitical tensions in the Middle East also kept markets cautious.
At the same time, data on Friday showed that Japan’s core and headline inflation rates slowed to a five-month low of 2.5% and 2.4%, respectively, in September. However, the core inflation reading came in slightly above expectations of 2.3%. On the monetary policy front, Bank of Japan board member Seiji Adachi recently reiterated that the central bank should raise interest rates at a “very gradual pace,” warning that the Bank of Japan should avoid a drastic policy shift given uncertainty about the global economic outlook and domestic wage growth.
USD/JPY Technical Analysis and Expectations Today:
As we mentioned before, the USD/JPY price moving above the psychological resistance of 150.00 will strengthen the bulls’ control over the trend. According to the performance on the daily chart by moving towards the current resistance levels of 150.80 and the resistance of 151.40. technically, he technical indicators will move towards strong overbought levels. If the dollar gains calm down, the currency pair may be exposed to profit-taking operations quickly. On the other hand, and in the same time frame, to break the current trend on the currency pair, the support level of 147.30 will be broken again.
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