- USDJPY takes offers to reverse the previous day bounce off a two-week low.
- Yields remain sidelined amid downbeat US inflation expectations, mixed Fedspeak.
- BOJ’s Kuroda defends easy money policy, hopes slowdown in consumer inflation.
- US CPI for October will be crucial as downbeat forecasts tease bears.
USDJPY sellers return to the table, after the previous day’s absence, amid bearish bias for the US inflation and downbeat Fedspeak. Also exerting downside pressure on the Yen pair are the sluggish yields and the latest comments from Bank of Japan (BOJ) Governor Haruhiko Kuroda. That said, the quote drops towards the intraday low surrounding 146.10 during early Thursday morning in Europe, fading Wednesday’s rebound from the lowest levels in a fortnight.
BOJ’s Kuroda reiterated his favorite speech in testimony to Diet, the Japanese parliament, while defending the Japanese central bank’s easy money policy. The BOJ Boss also turned down the hopes of any direct forex market intervention by the central bank to safeguard the national currency.
Elsewhere, the US Treasury yields remain mixed after declining in the last two consecutive days. While portraying the mood of the bond traders, the 10-year Treasury yields pause the two-day downtrend near 4.10% whereas the US two-year bond coupons print the first daily gains, so far, in three around 4.60% at the latest.
On the other hand, Minneapolis Federal Reserve (Fed) President Neel Kashkari recently mentioned, “We will do what we need to do to bring inflation back down.” Before him, New York Federal Reserve (Fed) President John Williams previously mentioned that the relatively stable long-term inflation expectations are good news. On the same line, Richmond Fed President Thomas Barkin also mentioned that the Fed’s fight against inflation may lead to a downturn in the US economy but that is a risk that the Fed will have to take.
It’s worth noting that the US inflation expectations, as per the 5-year and 10-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, also weigh on the USDJPY prices.
Furthermore, a cautious optimism portrayed by the S& 500 Futures and stocks in the Asia-Pacific region also help the USDJPY bears to reverse the previous day’s gains. Headlines surrounding Russia also seemed to have favored the latest cautious optimism as Moscow appears to retreat from the only Ukrainian regional capital captured, namely Kherson. Furthermore, President Vladimir Putin is less likely to attend the upcoming G-20 summit in Bali, starting on November 15. Additionally, a slight reduction in China’s daily covid numbers, from 1,294 to 1,133 in Mainland, joins the receding hopes of Democrats to gain major power share in the US midterm elections to help favor the optimists.
Having witnessed a tumultuous week so far, USDJPY traders are likely preparing for the pair’s further downside amid hopes that easy US Consumer Price Index (CPI) for October could back the softer rate hikes in December. Forecasts suggest that the headline CPI will ease to 8.0% YoY from 8.2% prior while the more important Core CPI may remain mostly unchanged near 6.5%, compared to 6.6% previous readings.
Also read: US October CPI Preview: US Dollar to weaken on a CPI-inspired risk rally
Although the 50-DMA defends USDJPY buyers around 145.50, the upside momentum needs to cross the three-week-old resistance line, around 147.00 by the press time, to reverse the latest bearish trend.
|Today last price||146.19|
|Today Daily Change||-0.34|
|Today Daily Change %||-0.23|
|Today daily open||146.53|
|Previous Daily High||146.8|
|Previous Daily Low||145.17|
|Previous Weekly High||148.85|
|Previous Weekly Low||145.67|
|Previous Monthly High||151.94|
|Previous Monthly Low||143.53|
|Daily Fibonacci 38.2%||146.18|
|Daily Fibonacci 61.8%||145.79|
|Daily Pivot Point S1||145.54|
|Daily Pivot Point S2||144.54|
|Daily Pivot Point S3||143.91|
|Daily Pivot Point R1||147.16|
|Daily Pivot Point R2||147.79|
|Daily Pivot Point R3||148.79|
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD rises toward 1.0800 as USD weakens
EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.
GBP/USD closes in on 1.2300 as mood improves
GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.
Gold: XAU/USD pared losses and consolidates around $1,950.00 Premium
Spot gold trades in the $1,950 price zone, sharply down on Monday as investors move away from safe-haven assets. The sentiment is positive at the start of the week amid easing concerns related to a global banking crisis.
Four reasons why SUSHI holders will have a bullish week despite SEC's move
SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.
Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk
BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.