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USD/JPY trades with mild losses below 155.00 on risk-aversion

  • USD/JPY snaps the two-day winning streak around 154.65 in Wednesday’s early Asian session. 
  • Fed’s Powell emphasized that the current level of policy will likely stay in place until inflation gets closer to target.
  • BoJ is shifting to a more discretionary policy-setting approach, with less focus on inflation.

The USD/JPY pair trades with mild losses near 154.65 on Wednesday during the early Asian trading hours. The robust US economy and sticky inflation data have triggered the expectation that the Federal Reserve (Fed) might delay the easing cycle to September from June, which provides some support to the US Dollar (USD) against the Japanese Yen (JPY). However, the escalating tensions in the Middle East might boost safe-haven assets like JPY and cap the pair’s upside. 

Data released by the US Census Bureau showed on Tuesday that US Housing Starts fell 14.7% in March from a 12.7% increase in February (revised from 10.7%). The Building Permits declined 4.3% from a 2.3% rise (revised from 1.9%) in the previous reading. Industrial Production came in line with market expectation, rising 0.4% MoM in March from the 0.4% increase in February.

Several Fed officials, including Chairman Jerome Powell, emphasized the data-dependent stance of policy and have not committed to beginning the interest rate cuts. Fed Chair Jerome Powell said the US central bank has not seen inflation come back to the 2% target, indicating that interest rate cuts are unlikely anytime soon.

On the other hand, the Bank of Japan (BoJ) is shifting to a more discretionary approach in setting policy, with less emphasis on inflation. This, in turn, continues to weigh on the JPY and create a tailwind for the USD/JPY pair. Investors will take more cues from the BOJ's fresh quarterly growth and price projections due at its April 25–26 policy meeting, for fresh impetus. 

Meanwhile, the geopolitical tensions in the Middle East might lift the JPY and limit the upside of the USD/JPY pair. Late Tuesday, National Security Advisor Jake Sullivan said in a statement that new sanctions targeting Iran and sanctions against entities supporting the Islamic Revolutionary Guard Corps and Iran's Defense Ministry will be imposed in the coming days. Sullivan stated that the White House will not hesitate to continue to take action against the Iranian government. Tensions between Israel and Iran escalated after an attack on the Iranian embassy in Syria earlier this month, which killed two senior Iranian Revolutionary Guard Corps leaders. Iran blamed Israel for the attack, but Israel did not claim responsibility.

USD/JPY

Overview
Today last price154.62
Today Daily Change-0.10
Today Daily Change %-0.06
Today daily open154.72
 
Trends
Daily SMA20152.08
Daily SMA50150.54
Daily SMA100147.94
Daily SMA200147.42
 
Levels
Previous Daily High154.79
Previous Daily Low153.9
Previous Weekly High153.39
Previous Weekly Low151.57
Previous Monthly High151.97
Previous Monthly Low146.48
Daily Fibonacci 38.2%154.45
Daily Fibonacci 61.8%154.24
Daily Pivot Point S1154.15
Daily Pivot Point S2153.58
Daily Pivot Point S3153.27
Daily Pivot Point R1155.04
Daily Pivot Point R2155.36
Daily Pivot Point R3155.93

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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