USD/JPY Forecast and News
USD/JPY surges to near 155.50 as Fed expects to prolong policy rates
USD/JPY extends winning streak amid hawkish sentiment surrounding the Fed’s stance on monetary policy. Fed's Kashkari anticipates the prolonging of elevated rates and suggests that further rate hikes are not entirely ruled out. The Japanese Yen depreciated despite the potential for intervention by Japanese authorities.
Latest Japanese Yen News
USD/JPY Technical Overview
USD/JPY trades around 155.30 during the early European session on Wednesday, marking a third consecutive day of gains. The US Dollar (USD) gained ground due to the possibility of the Federal Reserve's (Fed) prolonging higher interest rates. Furthermore, hawkish remarks from Minneapolis Fed President Neel Kashkari have strengthened the Greenback, thereby underpinning the USD/JPY pair.
Fundamental Overview
As reported by Reuters on Tuesday, President Kashkari's remarks, imply an anticipation of unchanged interest rates for a considerable period. While the likelihood of rate hikes is low, they are not entirely discounted.
According to Bloomberg, Richmond Federal Reserve (Fed) President Thomas Barkin remarked on Monday that elevated interest rates could likely restrain economic growth in the United States (US). However, higher interest rates can help alleviate inflationary pressures, bringing them closer to the central bank's 2% target.
Last week, the Japanese Yen (JPY) saw appreciation amid speculations of potential intervention by Japanese authorities. Reuters reported data from the Bank of Japan (BoJ) suggesting that Japanese authorities may have allocated approximately ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to support the JPY. However, these interventions could only provide temporary relief, given the significant interest rate differentials between Japan and the United States (US).
Despite continued warnings from Japanese authorities against extreme currency movements, the Japanese Yen depreciated. Finance Minister Shunich Suzuki reiterated the warning that authorities are prepared to respond to excessive foreign exchange volatility, while Bank of Japan (BoJ) Governor Kazuo Ueda stated that they will assess the impact of Yen movements on inflation to inform policy decisions.
USD/JPY Big Picture
USD/JPY Bullish Themes
USD/JPY Bearish Themes
Latest JPY Analysis
Editors' picks
EUR/USD retreats to 1.0750 as USD recovers
EUR/USD stays under modest bearish pressure and trades slightly below 1.0750 in the European session on Wednesday. Hawkish comments from Fed officials help the US Dollar stay resilient and don't allow the pair to stage a rebound.
GBP/USD drops below 1.2500 ahead of Thursday's BoE event
GBP/USD stays on the back foot and trades in negative territory below 1.2500 after losing nearly 0.5% on Tuesday. The renewed US Dollar strength on hawkish Fed comments weighs on the pair as market focus shifts to the BoE's policy announcements on Thursday.
USD/JPY surges to near 155.50 as Fed expects to prolong policy rates
USD/JPY extends winning streak amid hawkish sentiment surrounding the Fed’s stance on monetary policy. Fed's Kashkari anticipates the prolonging of elevated rates and suggests that further rate hikes are not entirely ruled out. The Japanese Yen depreciated despite the potential for intervention by Japanese authorities.
Gold price trades with mild positive bias, despite a firmer US Dollar
Gold price attracts some buyers during the Asian trading hours on Wednesday. Safe-haven demand, fueled by geopolitical tensions and uncertainty, as well as ongoing central bank purchases, might contribute to a rally in gold.
WTI remains on the defensive around $78.00 amid signs of easing supply tightness, stronger US Dollar
Western Texas Intermediate, the US crude oil benchmark, is trading around $78.00 on Wednesday. The black gold edges lower due to a stronger US Dollar and signs of easing supply concerns. Oil traders will shift their focus to the EIA Crude Oil stockpiles report due later on Wednesday.
Majors
Cryptocurrencies
Signatures
USD/JPY YEARLY FORECAST
How could USD/JPY move this year? Our experts make a USD/JPY update forecasting the possible moves of the yen-dollar pair during the whole year.
USD/JPY FORECAST 2024
The Japanese Yen could receive support from the BoJ if it indicates a shift toward ending its ultra-loose monetary policy stance, potentially through a rate hike that would mark the end of seven years of negative rates. Governor Ueda and Deputy Governor Hino offered some comments about it in December. Rumors and speculations in that direction would trigger momentum for the Yen. Read more details about the forecast.
The divergence in monetary policy between the Federal Reserve and the Bank of Japan led the pair to test the multi-decade high near 152.00.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR USD/JPY
There is a possibility that the BoJ might end its negative interest rate policy (NIRP) by raising the key rate to 0.00% in 2024. Some analysts anticipate the eventual end of YCC by January, while others believe it is more likely to occur during the second quarter. A significant challenge for the BoJ is to exit from NIRP without disrupting the economy.
Governor Kazuo Ueda has emphasized that any move will be carefully calculated, and the central bank will likely prepare the market for a change. This scenario is more likely to materialize if inflation in Japan remains above 3%.
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
The Bank of Japan (BOJ)
The Bank of Japan is the central bank of Japan and it's a juridical person established based on the Bank of Japan Act, nor being a government agency either a private corporation. The most important missions of the BOJ are the following: to issue and manage banknotes, to implement monetary policy and to ensure stability of the financial system. Almost all of the decisions are taken by the Policy Board, formed by a bunch of members working to provide currency and monetary control and setting the next moves that the central bank will take.
BOJ Official Website and on Twitter
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Kazuo Ueda
Kazuo Ueda is the 32nd and current Governor of the Bank of Japan. He is a professor and the dean of the business department at Kyoritsu Women's University in Tokyo and the external director at JGC Holdings Corp, an engineering company and at the state-owned Development Bank of Japan. The 71-year-old is widely seen as an expert on monetary policy but is seen as a surprise appointment by analysts. He was not even considered a dark-horse candidate. Ueda wasn’t really on their radar because the BOJ governor job has traditionally been assumed by a long-serving Finance Ministry bureaucrat or central bank official.
Ueda on Wikipedia's Profile
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
About USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low-interest rate and is normally used in carrying trades. This is the reason why is one of the most traded currencies worldwide. In this pair, the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from the United States of America) and Japanese economies.
Trading this currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from the United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the United States and the United Kingdom affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.