USD/JPY faces pressure near 143.00 as Fed’s rate cut bets soar

USD/JPY struggles for a firm recovery as the Fed is expected to start lowering interest rates in early 2024.
The USD index refreshes five-month low amid risk-on mood.
The BoJ will reduce bond-buying operations in 2024.

Sagar Dua FXStreet

The USD/JPY pair delivered a pullback move after discovering moderate buying interest near 142.00. The asset is expected to resume its downside journey as the pullback move seems short-lived due to downbeat US Dollar Index (DXY).

S&P500 futures remain flat in the European trading session, portraying a quiet market mood in a truncated week amid festive mood. The US Dollar Index has refreshed five-month low near 101.40 as investors hope that Federal Reserve’s (Fed) rate-tightening campaign is over and it will start cutting them to avoid any impact on the labour market.

The United States core Personal Consumption Expenditure price index (PCE) for November, released on Friday, was decelerated to 3.2% against expectations of 3.3% and the former reading of 3.5%. A softer-than-projected decline in the underlying inflation has boosted expectations for early rate cuts by the Fed.

It is highly anticipated that Fed policymakers may continue to push back expectations of early rate cuts without ensuring the achievement of the price stability. Resilient US economy due to tight labour market could keep inflation sticky ahead.

On the Tokyo front, the Bank of Japan (BoJ) is expected to endorse an exit from the ultra-loose monetary policy only after gaining confidence that wage growth could keep inflation steadily above 2%.

The BoJ has announced that it will reduce its bond-buying operations in 2024. This could be the outcome of inflation remaining above 2% for more than a year.

USD/JPY

Overview
Today last price	142.47
Today Daily Change	0.04
Today Daily Change %	0.03
Today daily open	142.43

Trends
Daily SMA20	144.59
Daily SMA50	147.85
Daily SMA100	147.65
Daily SMA200	142.88

Levels
Previous Daily High	142.64
Previous Daily Low	142.09
Previous Weekly High	144.96
Previous Weekly Low	141.86
Previous Monthly High	151.91
Previous Monthly Low	146.67
Daily Fibonacci 38.2%	142.43
Daily Fibonacci 61.8%	142.3
Daily Pivot Point S1	142.14
Daily Pivot Point S2	141.84
Daily Pivot Point S3	141.6
Daily Pivot Point R1	142.68
Daily Pivot Point R2	142.93
Daily Pivot Point R3	143.23

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.