USD/JPY Forecast and News


USD/JPY clings to modest gains above mid-105.00s, focus remains on NFP

USD/JPY gains some positive traction on Friday and moves way from weekly lows. A goodish pickup in the USD demand seemed to be the only factor lending support. A combination of negative factors might cap the upside ahead of the US jobs report.

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Technical Overview.

The USD/JPY pair traded with a mild positive bias through the early European session and was last seen hovering near the top end of its daily range, around the 105.65 region.

The pair gained some traction on the last day of the week and built on the previous day's late rebound from weekly lows, around the 105.30 region.


Fundamental Overview

 A goodish pickup in the US dollar demand was seen as one of the key factors lending some support to the USD/JPY pair. However, a combination of negative factors might hold investors from placing any aggressive bets and keep a lid on any further gains, at least for the time being.

The global risk sentiment took a hit on Friday after the US President Donald Trump signed a pair of executive orders that would ban any US transactions with the Chinese companies that own TikTok and WeChat. The anti-risk flow was evident from a weaker trading sentiment around the equity markets, which might force investors to take refuge in traditional safe-haven assets and underpin demand for the Japanese yen.

The global flight to safety was further reinforced by the ongoing downfall in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond dropped back closer to all-time closing lows. This coupled with concerns about the pace of the US economic recovery might hold the USD bulls from placing aggressive bets.

Apart from this, the political stalemate over the shape and size of the next US fiscal recovery package might further contribute towards capping any strong gains for the USD/JPY pair. The US Treasury Secretary Steven Mnuchin warned on Thursday that Republicans and Democrats are still very far apart on key issues.

Investors might also prefer to wait on the sidelines ahead of Friday's release of the official US monthly jobs report, popularly known as NFP. This makes it prudent to wait for some strong follow-through buying before confirming that the USD/JPY pair might have bottomed out in the near-term and positioning for any further gains.



SPECIAL WEEKLY FORECAST

Interested in weekly USD/JPY forecasts? Our experts make weekly updates forecasting the next possible moves of the yen-dollar pair. Here you can find the most recent forecast by our market experts:

USD/JPY Weekly Forecast: Friday’s are for profit taking

Dollar/yen breaks 106.00 support on Monday and 105.00 on Wednesday. General dollar weakness infects USD/JPY down 2.5% in six sessions to Friday’s low. US statistics, Covid, stimulus paralysis in Washington played a part in drop. Ministry of Finance comments, profit taking, better US statistics, Treasury rates and month-end positioning prompted sharp dollar recovery on Friday.

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Big Picture

USD/JPY Bullish Themes

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FXS Signals

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Editors' picks

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USD/JPY clings to modest gains above mid-105.00s, focus remains on NFP

USD/JPY gains some positive traction on Friday and moves way from weekly lows. A goodish pickup in the USD demand seemed to be the only factor lending support. A combination of negative factors might cap the upside ahead of the US jobs report.

USD/JPY News

Gold consolidates near record highs, flat-lined around $2060 area ahead of NFP

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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. Don't miss our 2020 USD/JPY forecast!

2020 FORECAST FOR USD/JPY

In our USD/JPY Price Forecast 2020, our dedicated contributors seeing an overall bullish picture. By the end of the year 2019, the average forecast for the pair was 108,6800. Read more details about the forecast.

From July 2019 to January 2020, the maximum level for the USD/JPY was 119.58¥/USD (on December 16th 2019), and the minimum, 104.72¥/USD (on August 25 2019).

MOST INFLUENTIAL POLITICAL EVENTS IN 2020 FOR USD/JPY

Sino-American relations will likely continue moving markets early in the year. Financial markets will likely seek assurances that the world’s largest economies are not on course to any deterioration.

The Bank of Japan is unlikely to move, but would probably like to keep on waving its stick and threaten more action.


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 hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.

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.


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.

Haruhiko Kuroda

Haruhiko Kuroda was nominated, by Prime Minister Shinzo Abe, as Governor of the Bank of Japan in March 2013. He had previously worked as President of the Asian Development Bank for 8 years. As the head of the BOJ, he has a major influence over the Japanese Yen. His words are usually followed by traders in order to find any clue of next possible trend in the currency. 

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 widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.

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.