USD/JPY long term targets and wages

Brian Twomey Brian's Investment

From Japan’s financial press overnight, Economists see the Wage negotiations resulting in an average increase of around 3.9% in annual pay for union workers at major firms. That would be the biggest rise in 31 years. Not much difference from the 3.6% last year. I don’t see how this lends credence to an interest rate change.

From the Japanese Government: Government draft budget for fiscal 2024, currently under deliberation in parliament, features general-account spending of ¥112.57 trillion ($746 billion) — the second-highest figure on record.

The BOJ is running a massive surplus. A possible raise means the money supply surplus begins to drop. To not touch rates means money supplies remains the same. A drop to rates means a higher surplus.

In terms of money supplies and interest rate levels: the BoJ is in good shape.

Long term, USD/JPY sits on averages at 137.20, 127.96 and 122.80. Targets 146.70, 139.43 and 134.82. Higher must break 148.52. Range 146.70 to 148.52.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

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