USD/JPY retreats from fortnight top to 133.00 on BoJ talks, Fed’s favorite inflation eyed


  • USD/JPY trims intraday gains at the highest levels in two week.
  • IMF’s Salgado signals more flexibility in BoJ YCC policy, Japan FinMin Suzuki advocates BoJ independence.
  • Mixed Japan data, sluggish yields and cautious optimism keep Yen pair buyers hopeful.
  • Quarter-end JPY flows, US Core PCE Price Index can entertain USD/JPY traders.

USD/JPY drops to 132.90 amid early Friday, after refreshing a two-week high, as market sentiment turns dicey ahead of the key US inflation catalysts. Adding strength to the pullback moves could be the chatters surrounding the Bank of Japan (BoJ) and mixed Japan data, not to forget the sluggish US Treasury bond yields.

Starting with the data, Tokyo Consumer Price Index (CPI) rose to 3.3% in March versus 2.7% expected but eased from 3.4% prior while the Tokyo CPI ex Food, Energy jumped to 3.4% compared to 3.2% previous readings and 3.3% market consensus. Further, Japan’s Industrial Production growth rallied to 4.5% MoM in February compared to 2.7% estimations and -5.3% prior while Retail Trade also improved during the stated month to 6.6% from 5.0% prior and 5.8% analysts’ forecasts. On the contrary, a surprise jump in Japan’s Unemployment rate, from 2.4% to 2.6% in February, can be cited as resulting in the Japanese Yen’s (JPY) latest weakness.

Following that, Japan's Finance Minister Shunichi Suzuki said that he expects the Bank of Japan (BoJ) and Ueda to enforce monetary policy strongly. The same promotes the Japanese central bank’s autonomy and likely push for exiting the easy money policies, especially after the latest wage hike.

It should, however, the noted that International Monetary Fund (IMF) Japan Mission Chief Ranil Salgado saw the prospect and the potential of more flexibility at the long end of the curve under the Bank of Japan’s (BOJ) YCC policy.”

On the other hand, Federal Reserve Chairman Jerome Powell joined three other Fed Officials to back further rate hikes on Thursday, citing the need to tame the inflation woes. However, mixed US data raise doubts about the Fed policymakers’ hawkish rhetoric and rather concentrated on their rejection of banking crisis woes to weigh on the US Dollar, as well the Fed bets.  That said, the CME’s FedWatch Tool suggests a nearly 50% chance of a 0.25% rate hike in the May Fed meeting, versus 60% the previous day.

It’s worth mentioning that the central bankers from the Federal Reserve (Fed), the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank (SNB) have recently pushed back the fears of the banking crisis and allow the markets to remain optimistic.

Amid these plays, the S&P 500 Futures refresh a three-week high near 4,095, rising for the third consecutive day, as it traces Wall Street’s upbeat sentiment. That said, the US 10-year Treasury bond yields rose two basis points (bps) to 3.57% whereas the two-year counterpart grinds higher to 4.13% during a five-day uptrend.

Moving on, the Federal Reserve’s (Fed) preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) Price Index for February, will be crucial for clear directions as markets anticipate softer inflation to weigh on hawkish Fed bets.

Also read: US February PCE Inflation Preview: Bad news for the Dollar, good news for the Fed?

Technical analysis

A daily closing beyond the 50-DMA hurdle surrounding 133.00 becomes necessary for the USD/JPY bulls to keep the reins.

Additional important levels

Overview
Today last price 132.96
Today Daily Change 0.29
Today Daily Change % 0.22%
Today daily open 132.67
 
Trends
Daily SMA20 133.42
Daily SMA50 132.88
Daily SMA100 133.93
Daily SMA200 137.33
 
Levels
Previous Daily High 132.97
Previous Daily Low 132.21
Previous Weekly High 133
Previous Weekly Low 129.64
Previous Monthly High 136.92
Previous Monthly Low 128.08
Daily Fibonacci 38.2% 132.5
Daily Fibonacci 61.8% 132.68
Daily Pivot Point S1 132.26
Daily Pivot Point S2 131.85
Daily Pivot Point S3 131.5
Daily Pivot Point R1 133.02
Daily Pivot Point R2 133.38
Daily Pivot Point R3 133.79

 

 

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

GBP/USD resumes upside toward 1.3300 ahead of BoE rate call

GBP/USD resumes upside toward 1.3300 ahead of BoE rate call

The GBP/USD gains traction and approaches 1.3300 in European trading on Thursday, having found buyers near 1.3150. A broad US Dollar pullback and a rebound in risk sentiment offer support to the pair ahead of the BoE policy announcements. 

GBP/USD News
EUR/USD rises further toward 1.1200, focus shifts to ECB-speak

EUR/USD rises further toward 1.1200, focus shifts to ECB-speak

EUR/USD stays strongly bid toward 1.1200 in the European session on Thursday. The pair capitalizes on a renewed US Dollar retreat and an upbeat mood. Traders digest the Fed's dovish outlook, bracing for ECB-speak for fresh trading incentives. US data are also eyed. 

EUR/USD News
Gold hovers close to new high of $2,600 after Fed meeting

Gold hovers close to new high of $2,600 after Fed meeting

Gold (XAU/USD) edges higher and trades back in the $2,580s on Thursday after falling to the $2,540s following the US Federal Reserve (Fed) decision on interest rates the prior day.

Gold News
BoE expected to keep interest rate unchanged at 5% as price pressures persist

BoE expected to keep interest rate unchanged at 5% as price pressures persist

After a close call in August, the Bank of England’s September interest rate decision is keenly awaited for fresh cues on the bank’s future policy action and the pace of its bond sales.

Read more
Bitcoin surges to $62,000 mark after 50 bps Fed rate cut

Bitcoin surges to $62,000 mark after 50 bps Fed rate cut

Bitcoin and Ripple eye for a rally as they break and find support around their resistance barrier. Meanwhile, Ethereum demonstrates signs of recovery as it approaches a critical resistance level, indicating that an upward rally could be on the horizon if it successfully breaks through.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures