Japanese Yen plummets after BoJ Governor Ueda's remarks, pushing USD/JPY to eighth month top

The Japanese Yen (JPY) continues losing ground following Bank of Japan (BoJ) Governor Kazuo Ueda's dovish comments at the post-meeting press conference. This comes on top of expectations that Japan's new Prime Minister Sanae Takaichi will pursue aggressive fiscal spending plans and further fuels uncertainty over the likely timing of the next rate hike by the BoJ. This, in turn, weighs heavily on the JPY.

Apart from this, the US-China trade optimism is seen undermining the JPY's safe-haven status. This, to a larger extent, offsets a modest US Dollar (USD) weakness and suggests that the path of least resistance for the USD/JPY pair is to the upside. Moreover, a technical breakout through the previous monthly swing high validates the positive outlook and backs the case for a further near-term appreciating move.

Japanese Yen bears seize control as BoJ Governor Ueda fuels rate-hike uncertainty

• The Bank of Japan, as was widely expected, decided to keep interest rates steady at the October policy meeting on Thursday amid the uncertainty over the impact of US trade tariffs and Japan's new Prime Minister Sanae Takaichi's pro-stimulus stance.
• In the post-meeting press conference, BoJ Governor Kazuo Ueda reiterated that the central bank will continue to raise the policy rate if the economy, prices move in line with the forecast. However, Ueda failed to provide cues about further tightening and said that there are no preset ideas about the timing of the next rate hike.
• Meanwhile, US Treasury Secretary Scott Bessent on Wednesday urged Japan's government to allow the BoJ space to avoid excess exchange rate volatility, suggesting that the US may keep pressuring Japan to tighten monetary policy more quickly.
• Hence, the market focus will remain glued to the BoJ's communication on the future pace of rate hikes, which will influence the near-term trajectory for the Japanese Yen. In the meantime, reviving safe-haven demand could offer some support to the JPY.
• US President Donald Trump will meet Chinese leader Xi Jinping after months of turmoil over trade issues between the world's two largest economies. This, in turn, keeps investors on the edge and underpins the JPY during the Asian session.
• The US Dollar shot to an over two-week top on Wednesday after the Federal Reserve pushed back against market expectations for another interest rate cut in December. Earlier, the US central bank lowered borrowing costs by 25 basis points.
• The US central bank also said it would stop reducing the size of its balance sheet as soon as December, marking the end of its quantitative tightening. Moreover, economic risks stemming from the US government shutdown weigh on the USD.

USD/JPY seems poised to climb further; breakout through 153.25-153.30 comes into play

The USD/JPY pair breakout through the 153.25-153.30 supply zone, or the previous monthly peak, which, along with positive oscillators on the daily chart, back the case for additional gains. Spot prices might now aim to reclaim the 154.00 mark and extend the momentum further towards the next relevant resistance near mid-154.00s en route to the 154.75-154.80 region and the 155.00 psychological mark.

On the flip side, weakness the 153.30-153.25 resistance-turned-support could be seen as a buying opportunity near the 153.00 mark. A convincing break below, however, might expose the Asian session low, around the 152.15 region. This is closely followed by the 152.00 mark, below which the USD/JPY pair could slide to the 151.55-151.50 area before eventually dropping to the 151.10-151.00 key support.