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Japan : Q1 2025 GDP Revision: Milder ContractionFinal data for Q1 2025 shows that Japan's economy contracted by 0.2% year-on-year (YoY), better than the initial estimate of -0.7% (Sources: english.kyodonews.net, reuters.com, fxstreet.com). Growth in household consumption and an increase in inventory levels were the main drivers, although the export sector remained a drag due to U.S. tariff pressures. On a quarterly basis (QoQ), the economy recorded flat growth (0.0%), exceeding expectations of a -0.2% contraction (Sources: reuters.com, fxstreet.com). In summary: The revision shows that Japan’s economy is not as weak as initially feared, though it still reflects underlying sluggish conditions.
Short
by arseniussofian
USDJPY Forecast for NFP Week | Price at a Critical Turning PointIn this video, I’m diving into the USDJPY setup ahead of a high-impact week filled with major economic news like the NFP, ADP Employment, and speeches from the BoJ Governor. We’ll walk through the technical zones I’m watching, discuss potential buyer and seller reactions, and outline the key catalysts that could move the market. 🔔 Don’t forget to like the video in support of my work. Disclaimer: Based on experience and what I see on the charts, this is my take. It’s not financial advice—always do your research and consult a licensed advisor before trading. #USDJPY #ForexForecast #NFPWeek #ForexMentor #TechnicalAnalysis #ForexTrading #BoJ #TradeSetups #PriceAction #MarketBreakdown
by darcsherry
11
Japan core inflation hits two-year high, yen gains groundThe yen is higher on Friday. Iin the European session, USD/JPY is trading at 143.63, down 0.37% on the day. Tokyo core CPI climbed to 3.6% y/y in May, up from 3.4% in April and above the market estimate of 3.5%. This marked the highest level since Jan. 2025. Tokyo core inflation is viewed as the leading indicator of nationwide inflation trends and is closely monitored by the Bank of Japan. Tokyo core CPI, which excludes fresh food, was driven higher due to due higher non-fresh food prices, particularly rice which has soared 93% over the past year. The jump in core CPI bolsters the case for a BoJ rate hike. The markets had anticipated a rate hike in October but today's strong inflation report could accelerate the timing of the next rate hike. At the same time, the uncertainty caused by US trade policy may force the BoJ to delay any rate hikes until the impact of US tariffs on Japan's economy becomes clearer. US President Trump's controversial tariffs have sent the financial markets on wild swings. Now, US courts are weighing in on whether Trump exceeded his authority when he imposed the tariffs. A trade court panel ruled this week that most of the tariffs were illegal but on Thursday, an appeals court granted the Trump administration a temporary pause, keeping the tariffs in effect. The legal fight over the tariffs has just begun and could go all the way to the US Supreme Court. In the meantime, the legal challenge has blown a hole in Trump's tariff policy and is causing even more uncertainty in the financial markets.
by OANDA
1
Japanese Markets: Still a Buy?Are Japanese markets still a buy after rising 170% since the pandemic, surpassing their roaring 1980s levels? The reason why Japanese stocks have become some of the best-performing equities in Asia is largely due to the falling yen — a depreciation of around 60%. A weaker yen boosts Japan’s major exporters, as their overseas earnings convert into higher yen profits. But what’s the downside? Inflation. (expand) Yes, they wanted inflation, below 2% yoy will be ideal, but not at this rate of growth at 3.5%. Micro Nikkei Futures Ticker: MNI Minimum fluctuation: 5.00 index points = ¥250 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Trading the Micro: www.cmegroup.com www.cmegroup.com
CME:NKD1!Short
by konhow
USDJPY - Will the dollar weakness stop?!The USDJPY currency pair is above the EMA200 and EMA50 on the 4-hour timeframe and is moving in its ascending channel. In case of correction due to the release of today's economic data, we can see a downward trend and then see the demand zone and buy in that range with an appropriate risk-reward ratio. A credible break of the indicated resistance range will pave the way for the currency pair to rise. Japanese Prime Minister Shigeru Ishiba emphasized that investment is more crucial to economic growth than tariffs, reaffirming Japan’s continued commitment to negotiating the removal of U.S. trade tariffs. He also pointed to encouraging signs in the Japanese economy following wage increases and offered an optimistic outlook on the country’s recovery. Meanwhile, Bank of Japan Governor Kazuo Ueda, speaking on Wednesday, warned that significant volatility in ultra-long-term bond yields could affect short-term borrowing costs, which in turn might exert a stronger impact on the broader economy. His remarks highlight the BOJ’s growing focus on recent fluctuations in long-dated bond yields, which could influence the board’s decision next month regarding the pace of its bond purchase reduction. Ueda explained that in Japan, short- and medium-term interest rates tend to have more direct influence on the economy than ultra-long yields, due to the maturity structure of household and corporate debt. However, he acknowledged in a parliamentary session that sharp moves in ultra-long yields can also affect long- and even short-term bond yields indirectly. Turning to Friday’s inflation report, expectations suggest that overall inflation remained subdued in April, as falling gasoline prices provided some relief to household budgets. However, core inflation—excluding food and energy—remains stubbornly high. The PCE inflation index is anticipated to have risen 2.2% in April from a year earlier, slightly down from 2.3% in March, marking the lowest level since last September. Federal Reserve officials are still awaiting more data on how newly imposed tariffs are feeding into the broader economy, making it unlikely that the recent moderation in inflation will prompt a rate cut in the near term. Although the Fed’s preferred inflation measure may have reached its lowest point since September, a second consecutive month of encouraging price data is unlikely to be sufficient to justify easing interest rates. According to a survey conducted by Dow Jones Newswires and The Wall Street Journal, economists expect Friday’s report—covering inflation, income, and spending—from the Bureau of Economic Analysis to show that consumer prices rose 2.2% year-over-year through April. This would mark the lowest reading since September and a potential turning point in the Fed’s battle against post-pandemic inflation. Goldman Sachs economists noted that falling gasoline prices have more than offset the inflationary impact of new tariffs introduced by the Trump administration. However, they cautioned that this dynamic may not last, as retailers are likely to start passing along the added import tax costs to consumers in the coming months. Several Federal Reserve officials, concerned that tariffs could reignite inflation, have stated that they will wait to assess the full impact of these trade policies on the economy before making changes to the federal funds rate—which directly affects borrowing costs on everything from mortgages and auto loans to credit cards.
Long
by Ali_PSND
Japanese yen tumbles to five-week low on US-China tariff dealThe Japanese yen has started the week with sharp losses. USD/JPY is trading at 148.18, up 1.9% on the day. Earlier, the yen strengthened to 148.59, its strongest level since April 3. The US and China have reached an agreement to slash tariffs on each other's products for 90 days. This would be a major de-escalation in the bruising tariff war between the world's two largest economies. Under the agreement, the US and China will slash tariffs by 115%, leaving US tariffs on China at 30% and China's tariffs on the US at 10%. The tariff agreement has boosted risk appetite, sending global stock markets higher. The deal has weighed on safe-haven assets like the yen, which is sharply lower on Monday. Gold, another safe-haven, has plunged 3.1% today. In Japan, household spending and wage growth were down in March. Household spending decelerated to 0.4% m/m, down sharply from 3.5% in February. Average Cash Earnings declined to 2.1% y/y, down from a downwardly revised 2.7% a month earlier. There was more bad news as service-sentiment for April eased, reflecting concern over US tariffs. These numbers support the case for the Bank of Japan to continue its wait-and-see stance before raising interest rates. The BoJ wants to see inflation remain sustainable at 2%, which will require higher wage growth and stronger consumer spending. Over the weekend, a host of Fed members made public statements. New York Fed President John Williams and Fed Governor Adriana Kugler both noted that current rate policy was in an appropriate place and suggested patience was needed. This message echoed Fed Chair Powell's remarks at last week's FOMC meeting, when he said the Fed would take a wait-and-see attitude due to the uncertainty over US tariffs. USD/JPY has pushed above resistance at 146.83 and 147.48 and is testing resistance at 148.47. Above, there is resistance at 149.04 146.11 and 145.36 are the next support levels
by OANDA
Yen rally ends, markets eyes Fed rate decision and BoJ minutesThe Japanese yen is in negative territory on Wednesday, after a three-day rally which saw it gain 2% against the US dollar. In the European session, USD/JPY is trading at 143.29, up 0.61% on the day. The Bank of Japan releases the minutes of its March meeting on Thursday. At the meeting, the BoJ held the key policy rate at 0.5% in a unanimous vote. Members cautioned that there was uncertainty over tariffs, which the US was expected to announce in April. Since then, the financial markets have see-sawed in response to President Trump's erratic tariff policy. Japan's export-reliant economy could be hit hard, but Tokyo is already negotiating with the US and hopes to carve out an agreement to cancel or at least mitigate the impact of the tariffs. The Bank of Japan is walking a tightrope, as it wants to continue to normalize policy and raise rates, but is worried about the uncertainty over the tariffs and the real possibility of a global trade war. Bank policymakers are taking a wait-and-see stance, hoping that US trade policy will become more clear. The Federal Reserve is virtually certain to maintain rates at today's FOMC meeting. There's little doubt about the decision but investors will be all ears as to the amount of pushback from Fed Chair Jerome Powell, after President Trump has repeatedly pushed him to lower rates. The markets have priced in a 30% chance of a cut in June, compared to a 63% likelihood just one week ago, according to CME's Fedwatch Tool. We can expect the pricing of a June cut to continue to swing, as the tariff saga continues.
by OANDA
USDJPY Poised to Retest Broken Trendline After Dovish BOJWe discussed the potential battle between bulls and bears near the trendline in our early April post. USDJPY bears ultimately won that battle, and the 140 target was reached. You can view the earlier post here: Following the breakdown, the 140 level acted as support, and now an upward reaction has begun. At today’s meeting, the BOJ held rates steady at 0.50% as expected, and Governor Ueda delivered a dovish message. The BOJ lowered its core inflation forecast by 0.2% to 2.2% for 2025 and to 1.7% for 2026. The GDP forecast was also revised down from 1.1% to 0.5%. These projections suggest the BOJ lacks full confidence in consistently reaching its 2% inflation target, though it's very close. However, the risk of tariffs complicates the outlook. Tariffs could negatively impact both growth and inflation, and the BOJ will likely hold off on further rate hikes for at least a few meetings to observe early effects. In the context of a more dovish BOJ and the dollar index stabilizing after weeks of declines, USDJPY is staging a positive correction. A retest of the broken trendline appears likely, with potential for the short-term rally to extend toward 148.50. Beyond that point, the market will face a critical decision. If the upward reaction stalls, another medium-term move back toward 140 remains a strong possibility.
by ftdsystem
Yen extends gains, BOJ Core CPI lower than expectedThe Japanese yen has rallied for a third straight day. In the European session, USD/JPY is trading at 140.38, down 0.33% on the day. The yen has climbed 1.3% since Thursday, as the US dollar is under pressure against the major currencies. BoJ Core CPI, a key inflation indicator, remained at 2.2% for a third consecutive month in March, shy of the forecast of 2.4%. This follows Japan's National Core CPI, which rose 3.2% y/y, matching expectations but higher than the 3.0% gain in February. National CPI eased to 3.6%, down from 3.7% in February and below the market estimate of 3.7%. The inflation data comes a week before the BoJ's policy meeting next week. The central bank has signaled that it will continue to raise interest rates as wages and inflation have been rising. However, the risks to inflation and growth from US tariffs have muddied the rate outlook and the BoJ may decide to push off another hike until later in the year. The finance ministers of Japan and the US will meet later this week, as Tokyo looks to carve out some tariff exemptions. The BoJ is likely to sit tight and see if the talks lead to a breakthrough. The US is expected to bring up the exchange rate, as President Trump has accused Japan of deliberately keeping the yen weak in order to protect its export sector. There are no key releases out of the US today, but we'll hear from three FOMC members later today. The markets have priced in a rate cut in May at 10%, with a 62% probability of a rate cut in June.
by OANDA
Yen surges to six-month high, BoJ cautiousThe Japanese yen continues to make inroads against the US dollar. In the North American session, USD/JPY is up 1.1% on Wednesday, trading at 144.60. Earlier, the yen strengthened to 143.98, its strongest level since Sept. 2024. Bank of Japan Governor Kazuo Ueda said on Wednesday that the central bank will have to determine the impact of US trade policy on growth and inflation in Japan. Ueda said that US tariffs had created new uncertainty and signaled that the BoJ might hold off on further interest rates until the situation became more clear. Ueda repeated that the BoJ would raise rates if the economy continued to improve, and currently, underlying inflation was rising and moving closer to 2% target. The uptake is that the BoJ is being very cautious with all the turmoil in the markets and is dampening expectations of a rate hike at the May 1 meeting. FOMC minutes - still relevant? The Federal Reserve will post its minutes of the March rate meeting. Investors scrutinize the minutes for policy clarity but global economic developments are unfolding so quickly that it's questionable if the minutes will be relevant with the massive market sell-off and the trade war between the US and China. Earlier today, the US lifted tariffs on China to an astounding 104% and China has retaliated with an 84% counter-tariff. The turmoil in the financial markets has nervous investors looking for safer shores, and are parking their funds in safe-haven assets like the Japanese yen and the Swiss franc. In April, the yen has jumped 3.3% against the US dollar, while the Swiss franc has soared 5% against the greenback. USD/JPY has pushed below support at 145.46 and is putting pressure on support at 144.64 There is resistance at 146.79 and 147.61
by OANDA
Japan's Business Sentiment Mixed, Yen StrengthensThe Japanese yen has gained ground on Tuesday. In the North American session, USD/JPY is trading at 149.27, down 0.47% on the day. The yen was red-hot in the fourth quarter of 2024, gaining a massive 9.5% against the US dollar, but has reversed directions in Q1, declining 4.7%. The Manufacturing Tankan index indicated that confidence among manufacturers eased to 12 in Q1 2025, down from 14 in the previous quarter. This was the lowest level in a year, reflective of growing concern among Japanese manufacturers over US tariff policy. The Non-manufacturing Tankan index, meanwhile, moved in the opposite direction, climbing to 35 in Q1, up from 33 in the Q4 2024 release. This was the fastest pace of growth since August 1991, as companies are increasingly passing on costs to consumers. The mixed Tankan report is unlikely to change the cautious stance of the Bank of Japan, which has expressed concerns about the uncertainty caused by the threat of additional US tariffs. The BoJ held rates steady in March and the next meeting is on May 1, with the markets projecting another hold. US President Donald Trump has threatened to impose wide-ranging tariffs on April 2, leaving US trading partners and the financial markets highly anxious ahead of what Trump has declared "Liberation Day". It is unclear which countries will be targeted or what the tariff rates will be, which has only added to financial market jitters. If Trump goes ahead with the tariffs and targeted countries retaliate with counter-tariffs, we will be one step closer to a global trade war. USD/JPY has pushed below support at 149.65. Below, there is support at 149.02 There is resistance at 150.59 and 151.22
by OANDA
Will the BoJ's hawkish approach affect the yen's strength? US equity markets plunged amid growing concerns that the Trump administration's tariffs, set to be announced on April 2, could be aggressively implemented. Goldman Sachs warned that US tariff rates could reach as high as 18%, potentially shaving 1.0% off GDP growth and pushing the unemployment rate to 4.5% this year. Bank of Japan Governor Kazuo Ueda signaled a continued tightening stance, stating that if persistently rising food prices lead to broader inflation, the central bank would consider raising interest rates. USDJPY broke below the support at 149.50 before retracing to 150.00. However, failing to reenter the channel, the price hovers near the channel’s lower bound. If USDJPY fails to reenter the channel, the price may break below 149.50 again. Conversely, if USDJPY reenters the channel, the price could gain upward momentum toward the resistance at 151.30.
by inkicho_exness
EURJPY Confirmed Pennant Pattern BreakoutOANDA:EURJPY Long Opportunity Price has made a Breakout of the Falling Resistance of the Pennant Pattern it has been forming the past couple of weeks. The Breakout meets all the requirements needed to be validated as a True Breakout! With Price trading above the 200 EMA, this adds more confirmation that the Bulls are in-control and we can reasonably expect to see price move to the Upside. At the Start of the Following Hour ( 09:00 CST ), I will enter a Long Position on OANDA:EURJPY with my SL below the Retest of the Break!
Long
by Novi_Fibonacci
4
Yen stabilizes after BoJ minutes hint at tighter policyThe Japanese yen has rebounded on Tuesday after sliding almost 1% a day earlier. In the European session, USD/JPY is trading at 150.11, down 0.39% on the day. The yen weakened to 150.94 in the Asian session, its lowest level since March 3. The Bank of Japan raised rates at the January meeting for only the third time since the central bank started its tightening cycle in March 2024. At the meeting, the Bank raised rates by a quarter point to 0.5%, its highest level since the 2008 global financial crisis. At the meeting, the BoJ revised upwards its inflation forecast as members have become more confident that rising wages will keep inflation sustainable close to the Bank's 2% target. The minutes noted that most members agreed that the likelihood of reaching the 2% target was rising. The minutes reiterated that the BoJ plans to continue to tighten policy, provided that growth and inflation outlooks match the Bank's forecasts. The BoJ has telegraphed that it plans to continue rates but has left investors guessing about a timeline. The most likely dates for the next rate hike are June or July. The BoJ held rates last week, warning of uncertainty in the global outlook, particularly the impact of the new US administration's trade policy. The BoJ is keeping a close eye on the upside risk of inflation, due to the potential of a global trade war as well as rising wages. Japan released BoJ core inflation, a key inflation indicator, earlier today. The February report came in at 2.2% y/y, unchanged from January and matching the forecast. BoJ core inflation remains at its highest level since March 2024.
by OANDA
CADJPY: Bearish Outlook as BOJ Stays HawkishHey Realistic Traders! BOJ’s Hawkish Stance, Will OANDA:CADJPY Turn More Bearish? Let’s Dive into the Analysis... Technical analysis On the H4 timeframe, CAD/JPY has repeatedly tested the 200 EMA but struggled to stay above it for long, indicating a strong bearish trend. Even the latest price correction failed to break above the 0.5 Fibonacci retracement level. Afterward, the price formed a bearish rising wedge pattern, followed by a breakout. The MACD indicator also signaled a bearish crossover, reinforcing the likelihood of further downside. Looking ahead, CAD/JPY could drop toward the first target at 101.505 and, if selling pressure persists, potentially reach the second target at 100.159. These levels align with previous price movements and key historical support zones. However, this bearish outlook remains valid only if the price stays below the key stop-loss level at 105.133. Market Sentiments Japan’s Bank of Japan (BOJ) is keeping its short-term interest rate steady at 0.5% while monitoring domestic wage growth and rising food prices. If inflation continues to rise, the BOJ may increase rates, potentially to 0.75% or higher, which could strengthen the yen and potentially make the CADJPY going lower. Support the channel by engaging with the content, using the rocket button, and sharing your opinions in the comments below. Disclaimer: "Please note that this analysis is solely for educational purposes and should not be considered a recommendation to take a long or short position on CAD/JPY"
Short
by financialfreedomgoals101
7
USD/JPY Direction 151 After the BoJ📊 Market Context As of March 18, 2025, the USD/JPY exchange rate stands around 149.38, reaching its highest level since March 5. This movement is driven by expectations regarding upcoming monetary policy decisions from both the Bank of Japan (BoJ) and the U.S. Federal Reserve. 🔍 Technical Analysis The technical analysis of USD/JPY highlights the following key points: Current Trend: USD/JPY shows a moderate recovery, with a 0.49% increase on March 17. Key Resistance: The area between 150.00 and 151.00 represents a significant resistance level. A decisive breakout above this zone could pave the way for further gains. Important Supports: Support levels are found at 148.00 and 146.50. A drop below these levels could indicate a deeper correction. Technical Indicators: Moving averages and key oscillators suggest a short-term bullish trend. 🌍 Fundamental Analysis Several fundamental factors are influencing the USD/JPY exchange rate: BoJ Decision: The Bank of Japan recently raised its key interest rate from 0.25% to 0.5%, citing higher wages and rising inflation. However, for today's meeting, the BoJ is expected to keep rates unchanged while assessing the impact of global trade tensions on the Japanese economy. U.S. Monetary Policy: The Federal Reserve is expected to keep interest rates stable in the upcoming meeting, with the Fed Funds rate projected to remain between 4.25% and 4.5%. Trade Tensions: U.S. trade policies under the Trump administration are creating economic uncertainties, influencing central bank decisions and currency markets. 🎯 Conclusion USD/JPY is currently in a consolidation phase near recent highs. If the BoJ maintains an accommodative monetary policy and the Fed keeps rates stable, the dollar could continue strengthening against the yen, targeting the key resistance level of 151.00. However, uncertainties related to trade tensions and future central bank actions require close monitoring by investors.
Long
by EdgeTradingJourney
2
Japan's GDP revised downwards, yen swingsThe Japanese yen is showing movement in both directions today.  In the North American session, USD/JPY is trading at 147.37, down 0.03% on the day. Japan's GDP expanded 2.2% y/y in the fourth quarter of 2024, lower than the initial estimate of 2.8%. The revision was expected to stay largely unchanged but was pushed lower due to a decrease in inventories and consumption. The GDP downward revision follows other soft data which points to weakness in Japan's economy.  Household spending slumped 4.5% m/m in January.  This was a sharp reversal from the 2.3% gain in December and missed the  estimate of -1.9%.  Annualized, household spending rose 0.8%, below the 2.7% in December and the market estimate of 3.6%.  On Monday, the wage growth report indicated that real wages declined by 1.8% in January, after two months of growth. How will the Bank of Japan react to the string of weak data? The annual wage negotiations are close to the end and the BoJ has urged companies and workers to reach a deal that significantly raises wages.  This would boost growth and consumption and help keep inflation sustainable at the BoJ's 2% target. The unions are asking for an average wage hike of 6%, up from 5.85% last year and the highest in more than 20 years.  Last year's wage agreement led to the BoJ raising rates for the first time since 2007 and this year's wage deal could pave the way for another rate hike.  The BoJ holds its next meeting on Mar. 19, five days after the wage settlement will be announced.  The BoJ isn't expected to make a move next week but investors are circling April or May as potential rate-hike meetings. There is resistance at 147.30 and 147.97 146.59 and 145.92 are the next support levels
by OANDA
Surging yen hits 5-month high, wage data mixedThe Japanese yen has started the week with strong gains.  In the European session, USD/JPY is trading at 147.07, down 0.766 on the day. Earlier, the yen strengthened to 146.72, its best level since Oct. 4, 2024. Japan's wage data for January was mixed. Base pay for Japanese workers jumped by 3.1% y/y but more importantly, inflation-adjusted real wages declined by 1.8%. This follows two consecutive months of gains and signals that inflation has outpaced growth. The wage report was released just days before the end of annual wage negotiations at Japan's largest companies. The largest labor union in Japan is demanding large wage hike of 6% and the Bank of Japan wants to see a strong rise in wages in order to keep inflation sustainable at the 2% level. The BoJ has urged companies and workers to reach a deal that significantly raises wages. The central back meets next week and is widely expected to keep interest rates unchanged. Still, the Bank has signaled it plans to continue raising rates during the year. In the US, nonfarm payrolls rose to 151 thousand in February, up from a downwardly revised 125 thousand in January but shy of the market estimate of 160 thousand.  The unemployment rate rose to 4.1% from 4%.  Wage growth eased to 0.3% m/m from a revised 0.4% in January, in line with expectations. Annualized, wages ticked higher to 4%, up from a revised 3.9% in January but below the market estimate of 4.1%. The employment report was decent but the threat of US tariffs continues to cloud the economic outlook. If trade tensions escalate, the Federal Reserve may have to adjust its rate path, depending on how tariffs affect inflation and growth. USD/JPY has pushed below support at 147.26 and is testing support t 147.26. Next is support at 1.46.48 148.51 and 148.98 are the next resistance lines
by OANDA
Japanese yen declines as Tokyo Core CPI easesThe Japanese yen has extended its losses on Friday.  In the European session, USD/JPY is trading at 150.39, up 0.40% on the day. After a string of releases that pointed to an upswing in inflation, Tokyo core CPI for February reversed the trend on Friday.  Japan's CPI, PPI and the Bank of Japan Core CPI all accelerated in the most recent releases but Tokyo Core CPI surprised to the downside, with a gain of 2.2% y/y.  This was down from 2.5% in January and below the market estimate of 2.3%. The soft Tokyo Core CPI reading is unlikely to raise many eyebrows at the Bank of Japan. The index remained above the BoJ's 2% target for a fourth consecutive month and Bank policymakers are expected to remain hawkish about monetary policy.  The BoJ raised rates in January and also revised its inflation forecasts upwards, a signal that further rate hikes are on the table. The markets are expecting the BoJ to continue tightening and this has been resulted in higher yields for Japanese government bonds, which hit a 15-year high earlier this month. Governor Kazuo Ueda responded to the sharp rise in bond yields with a warning that the central bank stood ready to intervene in the bond markets. Ueda's threat appears to have worked as bond yields have retreated slightly. The US wraps up the week with core PCE inflation, the Fed's peferred inflation gauge. The market estimates for January stand at 2.6% y/y (vs. 2.8% in December) and 0.2% m/m (vs. 0.3% in December). This would still be above the Federal Reserve's target of 2%. The Fed is not expected to lower rates before May, barring an unexpected surprise from inflation or employment data. USD/JPY tested resistance at 150.39 earlier.  Above, there is resistance at 150.98 There is support at 149.57 and 148.98
by OANDA
BoJ Core CPI climbs to 2.2%, yen declinesThe Japanese yen is slightly lower on Wednesday.  In the North American session, USD/JPY is trading at 149.25, up 0.16% on the day. What is the best performing G-10 currency against the US dollar this year?  Surprisingly, the Japanese yen is the winner, with gains of about 5% against the greenback.  This is a remarkable turnaround from 2024, when the yen plunged 11.4% against the US dollar and sank to its lowest level in 38 years. The yen's newfound strength is largely due to expectations that the Bank of Japan will continue to raise interest rates this year, unlike the other major central banks that have been lowering rates.  The BoJ has been raising rates slowly but with inflation indicators moving upwards, even the cagey BOJ has signaled that it will continue to raise rates. Japan's CPI hit 3.2% in January, a 19-month high, and this week's January inflation numbers are also pointing upward.  The producer price index jumped to 3.1%, up from 2.9% in December.  BoJ Core CPI climbed to 2.2% in January, up from 1.9% in December and its third consecutive acceleration.  Next up is Tokyo Core CPI on Friday. In the US, consumer confidence shocked with an unexpectedly weak report.  The Conference Board consumer confidence index slipped to 98.3 in January, well below the revised December reading of 105.3 and shy of the market estimate of 102.5.  The seven-point drop was the sharpest month-to-month decline since August 2021.  The report found that more consumers are expecting a recession.  Retail sales fell 0.9% m/m in December, the biggest decline in a year.  If consumer data continues to deteriorate, the Federal Reserve will have to consider accelerating the pace of rate cuts. USD/JPY is testing resistance at 149.30.  Above, there is resistance at 150.03 There is support at 148.30 and 147.57
by OANDA
Dollar weakens amid growing economic uncertainty Persistent tariff threats from the Trump administration and rising concerns over the U.S. economy are weighing on the dollar. Trump reaffirmed his commitment to implementing tariffs on Mexico and Canada according to schedule and reiterated the need for reciprocal tariffs. Meanwhile, weak consumer confidence data further rattled investor sentiment, as the February CB Consumer Confidence Index plunged to 98.3 from 105.3, marking its lowest level since June last year. In Japan, accelerating inflation increases the likelihood of a BoJ rate hike. According to the Ministry of Internal Affairs, Japan’s January CPI rose 3.2%, the largest increase since June 2023. Bloomberg noted that with Japan's inflation among the highest in the G7, the BoJ may continue scaling back stimulus and shifting toward a more restrictive policy stance. After breaking below the ascending trendline, USDJPY shows a persistent downtrend. After EMA21 death-crossed EMA78, it widens the gap and reinforces the bearish momentum. If USDJPY breaks below the support at 148.20, the price could extend its decline toward 145.00. Conversely, if USDJPY tests the resistance at 150.80, it may gain upward momentum toward 153.40.
by inkicho_exness