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USD/JPY moves upward towards 149.00, US data eyed

  • USD/JPY looks to approach 149.00 psychological level.
  • BoJ is considering an upward revision of the core inflation estimate for the fiscal year 2023/24.
  • China’s Country Garden is likely to formally default on a $15M coupon payment.

USD/JPY extends its gains on the second successive day, trading higher around 148.80 during the Asian session on Wednesday. The pair rebounded in the previous session on the positive risk sentiment in the midst of the Middle East conflict.

The Bank of Japan (BoJ) is considering revising its fiscal year 2023/24 core Consumer Price Index (CPI) estimate aiming for 3% compared to the previous forecast of 2.5%, which reflects an optimistic outlook on inflation.

The situation with China’s Country Garden's potential default on a $15 million coupon payment adds another twist. The property sector's challenges, despite signs of recovery in China's overall economy, are definitely something to keep an eye on.

If Country Garden goes through with the default, it could have broader implications for the Japanese Yen. Japan and China's economic ties are significant, and disturbances in one can often ripple into the other.

Additionally, the decline in Japan's non-seasonally adjusted Current Account for August, falling short of the forecast, might raise some concerns, especially when considering the broader economic context.

The report printed a reading of ¥2,279.7B, compared to the forecast of ¥3,090.9B and the previous reading of ¥2,771.7B. The Japanese economic calendar for the rest of the week is notably thin, with only low-impact data scheduled for release.

Moreover, Finance Minister Shunichi Suzuki's statement about the Yen weakening due in part to interest rate differentials sheds light on one of the factors influencing currency movements.

Leading a meeting of finance ministers and central bank governors from the Group of Seven (G7) nations on October 12 gives Japan a platform to discuss critical issues like the war in Ukraine and the state of the world economy.

On the other side, a slew of dovish-leaning comments from Federal Reserve’s (Fed) policymakers, expressing concerns that higher long-term US Treasury yields could prevent their bias to raise rates in the forthcoming meetings.

Atlanta's Fed President Raphael Bostic said that the current monetary policy is already restrictive, more additional rate hikes are not required. The dovish interest rate trajectory was established by two fellow Fed colleagues on Monday, with Minneapolis Fed President Neel Kashkari stated a similar statement on Tuesday.

The US Dollar Index (DXY) recovered from the intraday losses, trading around 105.80, by the press time. However, the 10-year US Treasury bond yield stands lower at 4.63% at the current press time.

Market participants will closely watch economic data, focusing on inflation figures. The Producer Price Index (PPI) is scheduled for Wednesday, followed by the release of the FOMC meeting minutes and the Consumer Price Index (CPI) on Thursday.

USD/JPY: additional important levels

Overview
Today last price148.82
Today Daily Change0.11
Today Daily Change %0.07
Today daily open148.71
 
Trends
Daily SMA20148.59
Daily SMA50146.76
Daily SMA100143.94
Daily SMA200138.62
 
Levels
Previous Daily High149.1
Previous Daily Low148.16
Previous Weekly High150.16
Previous Weekly Low147.32
Previous Monthly High149.71
Previous Monthly Low144.44
Daily Fibonacci 38.2%148.74
Daily Fibonacci 61.8%148.52
Daily Pivot Point S1148.22
Daily Pivot Point S2147.72
Daily Pivot Point S3147.28
Daily Pivot Point R1149.15
Daily Pivot Point R2149.59
Daily Pivot Point R3150.09

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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