The Japanese yen has posted a three-day slide and is in negative territory on Thursday. USD/JPY has risen 0.26% on the day and is trading at 155.93 at the time of writing.
Is the BoJ turning hawkish?
The Bank of Japan released its Summary of Opinions from its April 26th meeting earlier today. The meeting was uneventful as the BoJ maintained policy settings. The yen proceeded to slide and just a few days later broke below the 160 line, triggering a suspected intervention by Japan’s Ministry of Finance. Governor Ueda was criticized for failing to send a clear message at the meeting about further rate hikes, which may have boosted the ailing yen.
Ueda may have tried to rectify matters by stating on Wednesday that he was ready to tighten policy if inflation was higher than expected. The BoJ Summary of Opinions showed that many members called for the central bank to continue raising rates in order to reduce risks of inflation rising more than expected.
Will the hawkish BOJ Summary of Opinions push Ueda into action? That remains to be seen, as inflation will have to move higher before the BoJ tightens again. The Japanese economy remains fragile and a significant rate hike could risk tipping the economy into a recession.
The BoJ took the plunge in March and lifted rates into positive territory. Still, rates remain close to zero and the yen will remain under pressure as the US/Japan rate differential remains wide. The BoJ is showing signs of becoming more hawkish, such as the Summary of Opinions, but the path to normalization remains long.
USD/JPY technical
-
USD/JPY continues to rise is testing resistance at 155.96. Above, there is resistance at 156.42.
-
There is support at 155.22 and 154.76.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD turns sideways below 1.0900 ahead of Fedspeak
EUR/USD is trading sideways below 1.0900 in European trading on Monday, despite a risk-on market mood. The pair, however, finds support from the struggling US Dollar and sluggish US Treasury bond yields, awaiting Fedspeak amid light European trading.
Gold price consolidates near $2,450, fresh record highs
Gold price holds its upbeat momentum intact on Monday, sitting at fresh record highs of $2,450 in the European session. The bright metal benefits from renewed hopes for Fed rate cuts and renewed geopolitical tensions surrounding Iran. Fedspeak is next on tap.
GBP/USD holds steady near 1.2700, Fedspeak in focus
GBP/USD is off the highs, consolidating near 1.2700 in the European trading hours on Monday. A subdued US Dollar supports the pair amid moderate risk appetite. Traders stay cautious on potential geopolitical escalation in Iran and ahead of Fedspeak.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.