USDJPY Forecast and News
USD/JPY drops to fresh daily low, around mid-129.00s post-US PCE Price Index
The USD/JPY pair remains depressed through the early North American session and drops to a fresh daily low, around mid-129.00s following the release of the US macro data.
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Technical Overview.
From a technical perspective, the USD/JPY pair has been oscillating between two converging trend lines over the past two weeks or so, forming a symmetrical triangle on short-term charts. Given the recent sharp decline from over a three-decade high, this constitutes the formation of a bearish pennant and adds credence to the negative outlook for the USD/JPY pair. A convincing break below the triangle support, currently around the 128.60-128.50 region, will confirm a fresh breakdown. Spot prices might then turn vulnerable to weaken further below the 128.00 mark and challenge the multi-month low, around the 127.20 zone touched last week.
On the flip side, any strength beyond the 130.00 psychological mark might continue to confront stiff resistance near the top end of the aforementioned triangle. The said barrier is currently pegged near the 130.40-130.50 region, which should now act as a pivotal point. A sustained strength beyond could trigger a short-covering rally and lift the USD/JPY pair towards the 131.00 mark, en route to the post-BoJ swing high, around the 131.55-131.60 area. Some follow-through buying will negate the bearish bias and pave the way for a further near-term appreciating move.
Fundamental Overview
The USD/JPY pair edges lower for the third successive day and touches a fresh weekly low, around the 129.00 mark during the Asian session on Thursday. A combination of factors lends some support to the Japanese Yen (JPY) and acts as a headwind for the major amid subdued US Dollar price action. The prevalent cautious mood - amid fears of a deeper global economic downturn - underpins demand for the safe-haven JPY. Apart from this, fresh speculation that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year continues to lend support to the JPY. The bets were lifted by data released last week, which showed that Nationwide core inflation in Japan reached 4% in December - the highest annualized print since December 1981.
The USD, on the other hand, continues with its struggle to gain traction and languishes near an eight-month low amid firming expectations for a less aggressive policy tightening by the Fed. In fact, the markets seem convinced that the US central bank will soften its hawkish stance and have been pricing in a smaller 25 bps rate hike in February. This, in turn, keeps a lid on the recent move up in the US Treasury bond yields and continues to weigh on the buck. The downside for the USD/JPY pair, however, remains cushioned as traders prefer to move to the sidelines ahead of the Advance US Q4 GDP print, due for release later today. This, along with the US Core PCE Price Index on Friday, will influence the Fed's rate-hike path and provide a fresh directional impetus to the major.
The USD/JPY pair, meanwhile, reacts little to the BoJ's Summary of Opinions published this Thursday, which showed that the central bank wants to maintain its current monetary policy settings. The BoJ also mentioned additional purchases of JGBs as one of many possible actions it can take to keep the yield curve within its preferred range. This, however, fails to impress bullish traders or provide any meaningful impetus, making it prudent to wait for a sustained move in either direction before placing aggressive bets. Nevertheless, the fundamental backdrop, along with the recent price action, suggests that the path of least resistance for the major is to the downside. Hence, attempted recovery moves might still be seen as a selling opportunity and fizzle out rather quickly.
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Editors' picks
EUR/USD retreats to 1.0850 area as US Dollar rebounds
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GBP/USD trades on the back foot below 1.2400
GBP/USD is having a difficult time gathering recovery momentum and trading in negative territory below 1.2400 on Friday. Although the data from the US showed that PCE inflation continued to soften in December, the US Dollar holds its ground heading into the weekend.
USD/JPY drops to fresh daily low, around mid-129.00s post-US PCE Price Index
The USD/JPY pair remains depressed through the early North American session and drops to a fresh daily low, around mid-129.00s following the release of the US macro data.
Gold struggles to hold above $1,930
Gold price has lost its traction and declined below $1,930 during the American trading hours. The benchmark 10-year US Treasury bond yield clings to modest daily gains above 3.5% ahead of the weekend, not allowing XAU/USD to gain traction.
WTI grinds higher past $81.00 on softer US Dollar, cautious optimism over future oil demand
WTI crude oil price print mild gains as bulls and bears jostle around $81.30 during the third positive day on Friday morning. The black gold portrays the market’s cautious optimism surrounding the future energy demand, as well as cheers the US Dollar weakness, while waiting for fresh clues.
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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. Don't miss our 2022 USDJPY forecast!
USDJPY FORECAST 2022
In the USDJPY Price Forecast 2022, our dedicated contributors seeing a sideways tendency. By the end of the year 2021, the average forecast for the pair is 103.2100. Read more details about the forecast.
From January 2021 to December 2021, the maximum level for the USDJPY was 115.42¥/USD (on November 24th 2021), and the minimum, 103.49¥/USD (on January 21st 2021).
MOST INFLUENTIAL POLITICAL EVENTS IN 2022 FOR USDJPY
Political measures to counter coronavirus will be in the focus of the market this 2022. The prolonged impact of the pandemic resulted in major central banks launching asset-buying and lending programs while keeping policy rates near record lows.
Following decades of substantial growth, Japan has been suffering from stagnation since the 1990's stock buble crisis, marked by low inflation, low interest rates and sluggish growth. 2022 might be a a good time to think about the role of current monetary policies and their real impact on economic developments.
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
FED Official Website, on Twitter and Facebook
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.
BOJ Official Website and on Twitter
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.
Jerome Powell Fed's Profile and Wikipedia
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.
Draghi on BOJ'S Profile and Wikipedia
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
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.