USD/JPY Price Forecast: Extends losing streak for third trading day

USD/JPY declines for the third trading day in a row as the Japanese Yen outperforms.
BoJ Uchida keeps doors open for further interest rate hikes on hopes of steady wage growth.
The US Dollar faces selling pressures ahead of Fed Powell’s speech.

Sagar Dua FXStreet

The USD/JPY pair extends its losing spree for the third trading day on Thursday. The pair faces selling pressure as the Japanese Yen (JPY) continues to outperform across the board on hopes that the Bank of Japan (BoJ) will raise interest rates further despite elevated global economic uncertainty due to the fallout of tariffs by United States (US) President Donald Trump.

Japanese Yen PRICE This week

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

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.49%	0.16%	-0.19%	0.62%	0.15%	0.83%	0.45%
EUR	-0.49%		-0.20%	-0.13%	0.63%	0.29%	0.83%	0.44%
GBP	-0.16%	0.20%		0.25%	0.83%	0.50%	0.95%	0.64%
JPY	0.19%	0.13%	-0.25%		0.81%	-0.29%	0.16%	0.41%
CAD	-0.62%	-0.63%	-0.83%	-0.81%		-0.19%	0.20%	-0.18%
AUD	-0.15%	-0.29%	-0.50%	0.29%	0.19%		0.43%	0.12%
NZD	-0.83%	-0.83%	-0.95%	-0.16%	-0.20%	-0.43%		-0.41%
CHF	-0.45%	-0.44%	-0.64%	-0.41%	0.18%	-0.12%	0.41%

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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Traders have become increasingly confident about the BoJ raising interest rates again this year after comments from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida earlier this week that “wages are expected to continue rising” as Japan’s job market is very tight despite medium- to-long-term inflation expectations are likely to “temporarily stagnate”.

Meanwhile, the US Dollar (USD) is also underperforming ahead of Federal Reserve (Fed) Chair Jerome Powell’s speech at 12:40 GMT in a Thomas Laubach Research Conference in Washington. Financial market participants would like to know whether the Fed is still sticking to its stance of holding interest rates in the current range of 4.25%-4.50% despite soft US Consumer Price Index (CPI) data for April and a temporary US-China trade truce.

Ahead of Fed Powell’s speech, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades lower near 100.80.

USD/JPY retraces significantly from an almost six-week high of 148.54 to near 145.50 on Thursday. Still, the pair holds the 20-day Exponential Moving Average (EMA), which trades around 145.18, indicating that the near-term trend remains bullish.

The 14-day Relative Strength Index (RSI) struggles to break above 60.00. A fresh bullish momentum would trigger if the RSI breaks above the 60.00 level.

An upside move in the pair towards the psychological level of 150.00 and the March 28 high of 151.21 would come if it breaks above the May 13 high of 148.57.

The asset would face more downside towards the April 22 low of 139.90 and the 14 July 2023 low of 137.25 if it breaks below the May 7 low of 142.42.

USD/JPY daily chart

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

GBP/USD weakens below 1.3450 as US-Iran uncertainty boosts safe-haven US Dollar

The GBP/USD pair loses ground to near 1.3425 during the early Asian session on Tuesday. Uncertainty surrounding US-Iran talks drives traders toward a safe-haven currency such as the US Dollar against the British Pound. All eyes will be on the US July jobs data, which is due later on Friday.

EUR/USD flatlines above 1.1500 as traders turn cautious ahead of US NFP data

The EUR/USD pair holds steady around 1.1505 during the early European trading hours. Markets remain cautious ahead of the crucial US July jobs report, which is due later this week. Eurozone inflation ticked up in July, bolstering the case for a rate hike from the European Central Bank. The headline Eurozone inflation rose to 2.9% YoY in July from 2.8% in June, in line with expectations.

Gold consolidates above $4,050 amid Fed hike bets and Iran uncertainty

Gold seesaws between tepid gains and minor losses during the Asian session as traders seem hesitant and opt to wait for further developments surrounding the Middle East crisis. The US Dollar struggles to build on the previous day's solid bounce from the lowest level since Mid-June and acts as a tailwind for the bullion. However, the uncertainty over US-Iran peace talks helps limit the downside for the buck.

Ripple and Stellar steady as derivatives data points to easing downside pressure

Ripple and Stellar show mixed price action, with XRP holding above the key $1 support zone while XLM faces rejection at $0.173. Meanwhile, improving derivatives metrics alongside fading bearish momentum suggest that the downside pressure may be easing for both altcoins. Derivatives data shows mild bullish sentiment among traders.

NFP week: What awaits Bitcoin and Gold

This is an NFP week as markets brace for the release of a large influx of job market statistics. The data rollout begins with the JOLTS Job Openings report on Tuesday, continues with the ADP Employment report on Wednesday and Jobless claims on Thursday, and finishes with the Nonfarm Payrolls report on Friday.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.