Created
: 2025.03.28
2025.03.28 11:32
The Japanese Yen (JPY) drops to a nearly four-week trough against its American counterpart during the Asian session on Friday amid concerns that US President Donald Trump's trade tariffs could impact key domestic exports. The JPY bulls, however, got some respite following the release of strong consumer inflation data from Tokyo (Japan's capital city), which keeps the door open for more interest rate hikes by the Bank of Japan (BoJ). Moreover, the BoJ Summary of Opinions indicated that a rate hike is still on the table if the economy and prices move in line with the forecast.
Apart from this, the prevalent risk-off environment, fueled by Trump's auto tariffs late Wednesday, turns out to be another factor that underpins the safe-haven JPY and drags the USD/JPY pair below the 151.00 mark in the last hour. That said, the emergence of some US Dollar (USD) dip-buying could lend support to the currency pair and help limit further losses. Furthermore, traders might refrain from placing directional bets and opt to wait for the US Personal Consumption Expenditure (PCE) Price Index for cues about the Federal Reserve's (Fed) rate-cut path.
From a technical perspective, the intraday pullback from the vicinity of the monthly peak warrants caution before placing fresh bullish bets around the USD/JPY pair and positioning for further gains. Meanwhile, oscillators on the daily chart have just started gaining positive traction and support prospects for the emergence of some dip-buying near the 150.00 psychological mark. Some follow-through selling below the 149.85-149.80 region, however, would negate the positive bias and drag spot prices to the 149.25 support zone en route to the 149.00 round figure and the next relevant support near the 148.65 region.
On the flip side, a move beyond the monthly peak, around the 151.30 area, might confront some resistance near a technically significant 200-day Simple Moving Average (SMA), currently pegged near the 151.65 region. A sustained strength beyond the latter will be seen as a fresh trigger for bulls and allow the USD/JPY pair to reclaim the 152.00 mark. The positive momentum could extend further to the 152.45-152.50 region before spot prices aim to challenge the 100-day SMA, around the 153.00 round figure.
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of Japan's overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Thu Mar 27, 2025 23:30
Frequency: Monthly
Actual: 2.9%
Consensus: -
Previous: 2.9%
Source: Statistics Bureau of Japan
Created
: 2025.03.28
Last updated
: 2025.03.28
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