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USD/JPY climbs above 147.00 as US Treasury yields rise, and BoJ rate hike expectations wane

  • USD/JPY pair ascends and gains 1.04%, driven by higher US Treasury bond yields and global risk aversion sentiment.
  • Fed Governor Waller's cautious approach to rate cuts influences market expectations, reducing March rate cut bets from 78.9% to 63%.
  • Japanese economic data shows producer prices rising, but cooling core CPI projections may hold back BoJ from tightening monetary policy.

The US Dollar (USD) gains traction against the Japanese Yen (JPY) bolstered by a rise in US Treasury bond yields amid a risk aversion environment. That, along with Japanese economic data revealed during the month, brushing aside the chances for the Bank of Japan (BoJ) to raise rates has faded. Therefore, the USD/JPY trades at 147.18, gains 1.04%.

US Dollar gathers steam bolstered by yields, Fed’s Waller comments

The US 10-year Treasury bond yield is climbing more than ten basis points, up at 4.06%, sponsored by worldwide central bankers pushing back against rate cuts, a tailwind for the Greenback (USD). The US Dollar Index (DXY), a gauge of the buck’s value against a basket of rivals, climbs 0.70%, up at 103.39.

In the meantime, Federal Reserve’s Governor Christopher Waller said the Fed is closing to reach its 2% goal, and adding that even though he supports rate cuts, the US central bank shouldn’t rush to ease policy until it is clear that lower inflation would be sustained. He said the Fed should proceed “methodically and carefully,” adding that he “sees no reason to move as quickly or cut as rapidly as in the past.” Consequently, traders pared bets that the Fed would cut rates in March from 78.9% to 63%.

Data-wise, the US economic docket featured the New York Fed Empire State Manufacturing Index for January, which plunged to -43.7, below forecasts of -5 and a December reading of -14.5

On the Japanese front, prices paid by producers in December rose on a monthly basis by 0.3%, exceeding forecasts of 0%, and the annual basis slid to 0% from 0.3%. The data comes ahead of Friday’s inflation data, with the core Consumer Price Index (CPI) expected to cool down from 2.5% to 2.3% YoY, as foreseen by analysts. If the data continues to cool down, that might refrain the BoJ from normalizing monetary policy, despite BoJ’s Governor Ueda's comments that he’s confident that Japan would emerge from a deflationary mindset.

USD/JPY Technical Levels

USD/JPY

Overview
Today last price147.2
Today Daily Change1.40
Today Daily Change %0.96
Today daily open145.8
 
Trends
Daily SMA20143.38
Daily SMA50146.03
Daily SMA100147.37
Daily SMA200143.69
 
Levels
Previous Daily High145.94
Previous Daily Low144.87
Previous Weekly High146.41
Previous Weekly Low143.42
Previous Monthly High148.35
Previous Monthly Low140.25
Daily Fibonacci 38.2%145.53
Daily Fibonacci 61.8%145.28
Daily Pivot Point S1145.13
Daily Pivot Point S2144.47
Daily Pivot Point S3144.06
Daily Pivot Point R1146.2
Daily Pivot Point R2146.61
Daily Pivot Point R3147.27

Japanese Yen price today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.

 USDEURGBPCADAUDJPYNZDCHF
USD 0.73%0.65%0.38%1.02%0.99%0.91%0.68%
EUR-0.73% -0.07%-0.32%0.30%0.27%0.19%-0.04%
GBP-0.65%0.07% -0.26%0.37%0.34%0.24%0.01%
CAD-0.39%0.34%0.27% 0.63%0.60%0.52%0.29%
AUD-1.00%-0.29%-0.36%-0.64% -0.02%-0.10%-0.34%
JPY-1.00%-0.27%-0.38%-0.62%0.03% -0.09%-0.32%
NZD-0.89%-0.18%-0.24%-0.50%0.12%0.11% -0.23%
CHF-0.68%0.04%-0.03%-0.29%0.33%0.32%0.22% 

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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