USDJPY Forecast and News


USD/JPY extends the range play against USD as traders await FOMC meeting minutes

The Japanese Yen continues with its struggle to gain any meaningful traction on Wednesday. Intervention fears underpin the JPY, though the BoJ monetary policy uncertainty caps gains. Traders look to the FOMC minutes for cues about the Fed’s rate-cut path and a fresh impetus.

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Technical Overview

The recent range-bound price action warrants some caution before positioning for a firm near-term direction. That said, the recent breakout through the 148.70-148.80 horizontal barrier favours bullish traders. Moreover, oscillators on the daily chart are holding in the positive territory and are still away from the overbought zone, validating the constructive outlook for the USD/JPY pair. It, however, will still be prudent to wait for some follow-through buying beyond the mid-150.00s and the 150.85-150.90 region, or a multi-month top set last week, before positioning for any further gains. Spot prices might then climb to the 151.45 intermediate hurdle en route to the 152.00 neighbourhood, or a multi-decade peak set in October 2022 and retested in November 2023.

On the flip side, weakness below the mid-149.00s could attract some buyers near the 149.25-149.20 area. This is followed by the 149.00 round figure and the 148.80-148.70 resistance-turned-support, which should act as a key pivotal point. A convincing break below the latter will suggest that the USD/JPY pair has formed a near-term top and set the stage for some meaningful corrective decline. The subsequent downfall has the potential to drag spot prices to the 148.35-148.30 region en route to the 148.00 mark and the 100-day Simple Moving Average (SMA) support near the 147.70 zone.


Fundamental Overview

The Japanese Yen (JPY) extends its sideways consolidative price move on Wednesday and remains confined in a one-week-old range against its American counterpart through the Asian session. Geopolitical risks stemming from conflicts in the Middle East and the prolonged Russia-Ukraine war continue to weigh on investors' sentiment. This, along with the recent verbal intervention by Japanese authorities, turns out to be a key factors underpinning the safe-haven JPY. 

The US Dollar (USD), on the other hand, languished near its lowest level in almost three weeks touched on Tuesday in the wake of expectations for an imminent shift in the Federal Reserve's (Fed) policy stance. This further contributes to capping the upside for the USD/JPY pair. Traders, however, seem reluctant to place aggressive directional bets and now look to the FOMC meeting minutes, due later during the US session, for cues about the Fed's rate-cut path. 

Meanwhile, a recession in Japan fuelled uncertainty about the likely timing of when the Bank of Japan (BoJ) might pivot away from its ultra-easy monetary policy and exit the negative interest rates. This might also hold back traders from placing bullish bets around the JPY and help limit losses for the USD/JPY pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of the pullback from a three-month peak touched last week. 



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USDJPY Bullish Themes

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Editors' picks

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes

EUR/USD is holding gains above 1.0800 early Wednesday, having hit two-week highs on Tuesday. The US Dollar remains broadly weak, despite a mixed market mood, as investors weigh Fed rate cut bets and US government shutdown risks ahead of the Fed Minutes. 

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GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD clings to gains above 1.2600, all eyes on FOMC Minutes

GBP/USD is holding the renewed upside above 1.2600 in early Europe on Wednesday. The pair continues to draw support from hawkish comments from BoE Governor Bailey and an extended US Dollar weakness. The focus now shifts to the Fed Minutes, BoE- and Fed-speak.

GBP/USD News

USD/JPY extends the range play against USD as traders await FOMC meeting minutes

USD/JPY extends the range play against USD as traders await FOMC meeting minutes

The Japanese Yen continues with its struggle to gain any meaningful traction on Wednesday. Intervention fears underpin the JPY, though the BoJ monetary policy uncertainty caps gains. Traders look to the FOMC minutes for cues about the Fed’s rate-cut path and a fresh impetus.

USD/JPY News

Gold buyers retain control, with eyes on Fed Minutes

Gold buyers retain control, with eyes on Fed Minutes

Gold price sits at multi-day highs near $2,030 ahead of the Fed Minutes. US Dollar stays weak with the US Treasury bond yields, despite a tepid risk tone. Gold buyers flex muscles after recapturing 21-day SMA near $2,025. RSI flips bullish.  

Gold News

Crude Oil attracts some sellers above $77.00 amid geopolitical risks, FOMC Minutes eyed

Crude Oil attracts some sellers above $77.00 amid geopolitical risks, FOMC Minutes eyed

Western Texas Intermediate is trading around $77.10 on Wednesday. WTI prices edge lower as traders take profits from the crude oil uptick this month. However, the escalating geopolitical tensions in the Middle East might cap the downside of WTI prices.

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USDJPY YEARLY FORECAST

How could USDJPY move this year? Our experts make a USDJPY update forecasting the possible moves of the yen-dollar pair during the whole year.

USDJPY FORECAST 2024

The 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 USDJPY

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 USDJPY

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.

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.  

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About USDJPY

The USDJPY (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.