Japanese Yen: Policy path and support prospects – Rabobank

FXStreet Insights Team FXStreet

Rabobank’s FX Strategy team notes that USD/JPY is little changed after the latest BoJ meeting, with markets more focused on the upcoming Fed decision and new Fed President Warsh. The BoJ raised its policy rate to 1% and adjusted its JGB purchase plans, but implied rates still price limited tightening. Rabobank expects further BoJ policy signals to support the Japanese Yen and a lower USD/JPY over a three‑month horizon.

BoJ tightening, Fed focus and Yen outlook

"While no policy change is expected from the Fed for a while, any hints from Warsh tomorrow regarding his favoured communication methods and policy frameworks may provide fresh direction for USD/JPY."

"This means that if there were a rapid rise in long term interest rates, the BoJ could increase the amount of JGBs it purchases."

"Implied market rates indicate only another 15 bp of tightening is priced in on a 6-month view."

"This suggests that there is scope for the BoJ to signal support for the JPY if it can accelerate the pace of policy tightening."

"Our forecast of a move back to USD/JPY on a 3-month view assumes the BoJ signals further policy tightening is likely to be forthcoming before the end of the year."

(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 trims some losses, bounces back to 0.7150

AUD/USD has traded on the back foot on Monday, coming close to the 0.7100 mark before rebounding toward the 0.7150 region ahead of the opening bell in Asia. The Greenback’s solid performance has kept the risk complex under pressure, sending the Aussie to fresh monthly lows on the back of rising bets for a Fed rate hike this week. on Tuesday, investors are now expected to closely follow key data releases in China.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold retests $4,300; USD losses momentum

Gold picks up fresh upside traction and challenges the key $4,300 mark per troy ounce on Monday. The yellow metal, however, remain on the back foot on the back of marked gains in the US Dollar and rising US Treasury yields across the curve.

JasmyCoin: Upbit delisting raises risk of further losses

JasmyCoin shows signs of stability at the time of writing on Monday. However, the token remains constrained between support at $0.0035 and resistance at $0.0040. Since May, its technical structure has continued to deteriorate, with the price falling from highs of $0.0078. JASMY’s outlook suggests that bears have the upper hand as bulls fight to defend key support levels.

Will the Fed deliver the hawkishness markets are pricing in?

Fed hike bets increase after PPI and CPI reports. Updated dot plot to be crucial for the dollar’s reaction. Warsh’s independence faces test amid Trump’s pressure for lower rates. For the Dollar to extend gains, Fed needs to satisfy current hawkish bets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.