USDJPY - Buy opportunities
Fundamental Analysis & Market Sentiments
USD *
Trump wins the Presidential Election. Economists said that
the proposed tariff will likely cause inflation uncertainties.
FED more likely will not be more aggressive by cutting
its Interest rates. This can cause to dollar be more attractive
than the other currencies.
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JPY *
The Bank of Japan (BoJ) unanimously maintained its key
short-term interest rate at around 0.25% during its October
meeting. BOJ more likely hold its interest rate hiking until
next Year.
USD *
Trump wins the Presidential Election. Economists said that
the proposed tariff will likely cause inflation uncertainties.
FED more likely will not be more aggressive by cutting
its Interest rates. This can cause to dollar be more attractive
than the other currencies.
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JPY *
The Bank of Japan (BoJ) unanimously maintained its key
short-term interest rate at around 0.25% during its October
meeting. BOJ more likely hold its interest rate hiking until
next Year.
Trade active
USD *
The annual inflation rate in the US accelerated to 2.6% in October 2024, up from 2.4% in September. This will boost the expectation in the market to continue to price in fewer Fed cuts.
Fewer cuts means strong for USD.
Note
USD *
October producer price index report showing a 0.2% rise, meeting expectations, though core PPI exceeded forecasts. The October consumer price index, released earlier, also aligned with expectations but pointed to ongoing inflation pressures. Further pressure came after Fed Chair Powell stated in Dallas that there was no rush to lower rates given the economy's strength. Odds of a quarter-point rate cut at the central bank’s December meeting fell to 62%, down from 82.5% earlier in the day.
"FED is now giving us a clue about the upcoming Monetary policy meeting on December. Slow pace of cutting rates means bullish for the USD as they are not as aggressive with the other central banks to cut rates."
Note
USD *
Retail sales in the US increased 0.4% month-over-month in October 2024, following an upwardly revised 0.8% gain in September, and above market forecasts of 0.3%. Sales increased the most at electronics & appliance stores (2.3%); auto dealers (1.9%); food services & drinking places (0.7%); building material & garden equipment (0.5%); nonstore retailers (0.3%); general merchandise store (0.2%); food & beverage stores (0.1%); and gasoline stations (0.1%). In contrast, sales declined at miscellaneous store retailers (-1.6%); furniture stores (-1.3%); sporting goods, hobby, musical instrument, & book stores (-1.1%); and clothing (-0.2%). Excluding autos, retail sales edged up 0.1%. Meanwhile, sales excluding food services, auto dealers, building materials stores and gasoline stations, which are used to calculate GDP, decreased 0.1%, after its biggest gain since early 2023. Retail sales data is not adjusted for inflation and includes mostly goods
"The Downward movement we seeing right now is a correction for the price to create a HL. Keep an eye on this deep as the price is now sitting on the 61.8 FIB. You can wait for the price to hit the EMA20 and look for a candle stick information to Entry"
Note
JPY *
Japan Q3 GDP Growth Slows as Expected
Japan's GDP grew by 0.2% quarter-on-quarter in Q3 2024, moderating from a downwardly revised 0.5% increase in Q2 while aligning with market forecasts, preliminary data showed. The latest result marked the second consecutive quarterly expansion, yet highlighted a fragile economic recovery amid growing external headwinds. Business investment shrank by 0.2%, following a robust expansion of 0.9% previously, in line with expectations. Concurrently, net trade subtracted 0.4 percentage points, as exports (0.4% vs 2.6%) rose much less than imports (2.1% vs 2.9%). At the same time, private consumption, which accounts for more than half of the economic output, rose further (0.9% vs 0.7% in Q2), easily exceeding the consensus of a 0.2% growth, driven by rising wages. Meanwhile, government spending logged its third straight quarter of rise (0.5% vs 0.1%), reflecting efforts to mitigate the impact of natural disasters during the summer.
The Commitment Of Traders are also showing the data that Hedge funds are still shorting the Japanese Yen. This can support the narratives that BOJ likely will hold its interest rate hike this upcoming Monetary Policy Meeting.
Note
JPY *
BOJ Gov Ueda Speaks
Bank of Japan Governor Kazuo Ueda said the timing of the central bank’s next policy adjustment will depend on the economy and prices, underscoring his data dependent stance and keeping his options open over when to next hike rates.
“The Bank will make policy decisions based on its latest assessment of the current state of and outlook for economic activity and prices,” Ueda told local business leaders in Nagoya, central Japan on Monday.
"BOJ hinting us that the next rate hiking decision will be driven by Data, so we should keep an eye to the next data releases for economic and prices"
Note
JPY *
BOJ's Ueda offers few rate hints
Bank of Japan Governor Kazuo Ueda reiterated on Monday the central bank will keep raising interest rates if economic and price developments move in line with its forecasts, but made no mention of whether a hike could come in December.
His speech had been closely watched by investors for clues on the BOJ's next rate hike, which could have been seen as a way to push back against the yen's weakness.
The Japanese currency has fallen some 7% since October against a resurgent dollar and last week weakened past the 156 per dollar level for the first time since July, keeping traders on alert for any intervention from Japanese authorities.
It was last 0.3% lower at 154.72 per dollar, paring some of the losses it made as Ueda spoke.
On the chance of a BOJ hike next month, IG market analyst Tony Sycamore said it would "depend on where dollar/yen is to a degree".
"If dollar/yen's up at around 160, I think that would increase the (chances) of a rate hike. But I think he's probably not unhappy with dollar/yen sitting around 150, 152. I think that probably keeps him on the sidelines until next year.
"BOJ may intervene if their currency continues to depreciate more against the dollar at around 160. We need to be keep an eye of this as it may hint as for a hawkish decision from the BOJ for their interest rate."
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