The Japanese yen has surged on Thursday after showing little movement this week. In the European session, USD/JPY is trading at 152.68, at the time of writing, down 0.48% on the day. Earlier, USD/JPY rose as high as 0.9% before retracting.
Bank of Japan stays on the sidelines
The Bank of Japan didn’t have any surprises up its sleeve and held interest rates at 0.25% at today’s policy meeting. The BoJ released updated growth and inflation forecasts, but these didn’t provide any clues about rate moves as the forecasts had only minor revisions.
Governor Ueda said at a press conference that “inflation was moving in line with our forecasts” towards the 2% target, but added that he had no “preset idea” as to the timing of a rate hike. Ueda said that the central bank would make its rate decisions based on the data, which means that investors shouldn’t expect any broad signals from the BoJ about its rate path.
Ueda made reference to the currency markets and that has sent the yen flying higher. Ueda stated that the currency markets have had a strong impact on Japan’s economy. The markets took this as a possible indication that a rate hike will be sooner rather than later, although the BoJ is likely to wait until early 2025 before raising interest rates.
The BoJ has intervened in the currency markets when the yen depreciated quickly and another intervention could be in the works, as the yen has had a miserable October, falling 6.3%.
The political uncertainty is not helping the wobbly yen. Japan’s general election left the ruling Liberal Democratic Party without a majority and it’s unclear if Prime Minister Ishiba will be able to cobble together a government.
USD/JPY technical
-
USD/JPY tested support at 153.02 earlier. The next support level is 152.47.
-
153.64 and 154.19 are the next resistance lines.
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
AUD/USD turns south to test 0.6650 as US Dollar finds footing
AUD/USD is back in the red, testing 0.6650 in Friday's Asian trading. A renewed US Dollar uptick undermines the pair, even as risk sentiment remains in a sweeter spot. However, the downside appears limited amid the RBA's hawkish stance and hopes for more Chinese stimulus could act as a tailwind for the Aussie.
USD/JPY defends gains above 153.00 as Japan's intervention risks cap gains
USD/JPY defends minor bids above 153.00 early Friday, reversing a part of Thursday's corrective slide from its highest level since July 30. The upbeat market mood and the post-Fed US Dollar rebound support the pair but speculations over a likely Japanese intervention cap the pair's upside.
Gold price consolidates around $2,700 amid mixed cues
Gold price hovers around $2,700 in the Asian session on Friday, failing to extend the recovery from the vicinity of the 50-day SMA support, or over a three-week low. Resurgent demand for the US Dollar, despite improving risk tone, induces fresh weakness in Gold price.
Bitcoin, crypto market remain in uptrend following 25 bps Fed rate cut
The crypto market has remained in the green following the Federal Reserve's decision to lower interest rates. Historically, Bitcoin and the crypto market have reacted positively to low interest rate environments.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.