USD/JPY gives away post-election gains and returns to 152.50


  • The Dollar retraces the Asian session's gains and returns to the mid-range of 152.00.
  • Investors are taking US Dollar profits ahead of key US releases this week.
  • Political uncertainty in Japan suggestts that the BoJ will stand pat on Thursday.

The US Dollar has retraced most of the ground taken following the release of the Japanese election results, retreating from three-month highs at 153.75 to 152.50 so far.

The Yen dropped across the board during Monday’s Asian session as the elections in Japan delivered a significant defeat to the ruling party. The result opens an uncertain political scenario and puts into question the government’s support for the BoJ’s normalisation plans.

This scenario practically confirms that the Bank of Japan will keep interest rates on hold at its Thursday’s meeting.

The Dollar eases ahead of key US releases

The US Dollar, on the other hand, has opened the week on a somewhat softer tone. Investors might be trimming some USD longs, getting ready for a busy week, with US GDP. the PCE Prices Index and the Nonfarm Payrolls report, scheduled on the coming days.

The technical picture shows the broader bullish tone intact although the bearish divergence on the 4-hour RSI warns about a deeper correction. Supports are at Friday’s low, 151.60 ahead of 150.70. Resistances are 153.75 and 155.10.

Bank of Japan FAQs

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD tumbles toward 0.6400 amid weak Australian Q3 GDP and Chinese PMI

AUD/USD tumbles toward 0.6400 amid weak Australian Q3 GDP and Chinese PMI

AUD/USD is under intense selling pressure, fast-approaching 0.6400 early Wednesday. The pair bears the brunt of weaker Australian Q3 GDP data, disappointing Chinese Caixin Services PMI and US-Sino trade worries. Focus shifts to more US data and Powell's speech. 

AUD/USD News
USD/JPY consolidates the uptick to near 150.10

USD/JPY consolidates the uptick to near 150.10

USD/JPY is back below 150.00 in Wednesday's Asian session, struggling to extend the latest leg higher as bets for a December BoJ rate hike underpin the the Japanese Yen. However, the downside remains capped amid increased haven demand for the US Dollar on growing tariff war fears. 

USD/JPY News
Gold price traders await Powell's speech for rate cut cues

Gold price traders await Powell's speech for rate cut cues

Gold price extends its sideways consolidative move during the Asian session on Wednesday as traders opted to wait for Fed Chair Jerome Powell's speech. Apart from this, the US NFP report on Friday might provide cues about the interest rate outlook in the US and provide a fresh impetus to the non-yielding XAU/USD.

Gold News
Paul Atkins shows reluctance to replace SEC Chair Gary Gensler

Paul Atkins shows reluctance to replace SEC Chair Gary Gensler

Paul Atkins, regarded as a leading candidate to succeed Gary Gensler as Chairman of the Securities & Exchange Commission, has reportedly expressed a lack of enthusiasm for the position.

Read more
The fall of Barnier’s government would be bad news for the French economy

The fall of Barnier’s government would be bad news for the French economy

This French political stand-off is just one more negative for the euro. With the eurozone economy facing the threat of tariffs in 2025 and the region lacking any prospect of cohesive fiscal support, the potential fall of the French government merely adds to views that the ECB will have to do the heavy lifting in 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures