Japanese Yen: Key levels watched as BoJ speech looms – MUFG

FXStreet Insights Team FXStreet

MUFG’s Michael Wan notes that stronger US labour data have lifted US yields and supported the US Dollar (USD), complicating prospects for near-term Fed rate cuts. He highlights upcoming US ISM Services, Fed Beige Book and Non-Farm Payrolls (NFP) as crucial for US rates and the US Dollar, with USD/JPY already near 160 and Japanese policy signals from Bank of Japan (BoJ) Governor Ueda in focus.

US data and BoJ guidance in focus

"With that context in mind, the US ISM Services data and Fed Beige Book out later today, coupled with the US Non-Farm Payrolls later this week will probably be more important than usual in gauging turning points in both US rates, the US Dollar, and with that Asian currencies as well."

"We already have the likes of USD/JPY reaching shy of the 160 mark, and we wouldn’t be surprised if the Finance Ministry jawbones the currency and maybe intervenes once again at those key levels."

"Nonetheless, the fundamentals as mentioned about sticky US yields, but more importantly coupled with still low Japan real yields and fiscal policy turning more expansionary remain the key drivers."

"Ultimately we think the BoJ has to act and hike rates for the trend in USD/JPY to change, and BoJ Governor Ueda’s speech later today could be important in that regard in signalling the path forward."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.