Created
: 2024.10.31
2024.10.31 11:19
The Japanese Yen (JPY) extends its consolidative price move against its American counterpart on Thursday and remains close to a three-month low touched earlier this week. Traders opt to wait on the sidelines and refrain from placing aggressive directional bets ahead of the Bank of Japan (BoJ) policy decision later today. In the meantime, expectations that Japan's political landscape could force expansionary fiscal policy, and make it difficult for the Bank of Japan (BoJ) to hike interest rates further, continue to act as a headwind for the JPY.
That said, fears of possible government intervention and the cautious market mood offer some support to the safe-haven JPY. Apart from this, a subdued US Dollar (USD) price action keeps a lid on the USD/JPY pair through the Asian session. Meanwhile, bets for smaller interest rate cuts by the Federal Reserve (Fed) and deficit-spending concerns after the US election continue to push the US Treasury bond yields higher. This, in turn, favors the USD bulls and should contribute to capping the upside for the lower-yielding JPY.
From a technical perspective, the recent repeated failures to find acceptance beyond the 61.8% Fibonacci retracement level of the July-September downfall warrant some caution for bulls. Moreover, the Relative Strength Index (RSI) on the daily chart is on the verge of breaking into the overbought zone. This further makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for additional gains.
In the meantime, weakness below the 153.00 mark might continue to find some support near the 152.75-152.65 region ahead of the 152.40 area or the weekly low. Some follow-through selling could drag the USD/JPY pair to the 152.00 mark en route to the 151.45 support and the 151.00 mark. The downward trajectory could extend further towards challenging the 150.65 confluence resistance breakpoint, which should now act as a key pivotal point and a strong base for spot prices.
On the flip side, the 153.85-153.90 region now seems to have emerged as an immediate strong barrier. A sustained strength beyond, leading to a breakout through the 154.00 round-figure mark, has the potential to lift the USD/JPY pair towards the 154.35-154.40 supply zone en route to the 155.00 psychological mark. Spot prices could extend the momentum and eventually climb to test the late-July swing high, around the 155.20 region.
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank's eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Next release: Thu Oct 31, 2024 03:00
Frequency: Irregular
Consensus: 0.25%
Previous: 0.25%
Source: Bank of Japan
Created
: 2024.10.31
Last updated
: 2024.10.31
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy