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USDJPY - The weakness of the yen will stop?!The USDJPY currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its upward channel. In case of correction due to the release of economic data this week, we can see demand zone and buy within that range with appropriate risk reward. Breaking the downtrend line and the specified resistance range will pave the way for the currency pair to rise to the supply zone. We will sell currency pairs in that range. Bank of Japan (BOJ) to Release Review of Monetary Policy Tools According to Reuters, the Bank of Japan (BOJ) is set to release the findings of a comprehensive review next month, evaluating the advantages and drawbacks of various unconventional monetary policy tools employed over the past 25 years to combat deflation. This review is seen as a symbolic step towards ending BOJ’s era of massive stimulus measures. The report will include findings and surveys that justify BOJ’s plan to gradually normalize its monetary policies. The review’s results are expected to be published after the final BOJ policy meeting of the year, scheduled for December 18–19, and may include a potential rate hike from the current level of 0.25%. Japan’s ruling coalition, comprising the Liberal Democratic Party (LDP) and Komeito, has reached an agreement with the opposition Democratic Party for the People (DPP) on an economic stimulus package. The package includes cash handouts for low-income households, subsidies to assist with utility bill payments, and additional investments in artificial intelligence and semiconductors. The three parties have agreed to raise the income tax threshold and continue discussions on reducing gasoline taxes. This agreement requires legislative revisions to be addressed during next year’s parliamentary session. Following the ruling coalition’s loss of its majority in the lower house, DPP’s support has become crucial for advancing the package. However, some economists have expressed skepticism about the package’s limited impact on boosting consumer spending. BOJ Chief Kazuo Ueda’s Remarks: Kazuo Ueda, the BOJ Governor, stressed the need for the government to monitor medium-term financial sustainability. He stated that the policies of the new U.S. administration will be closely examined and integrated into Japan’s economic outlook as a key priority.Ueda also highlighted the transformative impact of generative AI on the financial industry. Massive Treasury Bond Sell-Off by Japan and China Meanwhile, Bloomberg reports that Japan and China, two of the largest holders of U.S. government debt, sold significant amounts of U.S. Treasury bonds during the third quarter of this year. Japanese investors offloaded a record $61.9 billion worth of these bonds in the quarter ending September 30, while Chinese funds sold $51.3 billion in the same period, marking the second-largest volume recorded. These sell-offs occurred ahead of the U.S. presidential election and Donald Trump’s victory.
Long
by Ali_PSND
Japanese yen declines on BoJ’s Ueda cautious remarksThe Japanese yen is lower on Monday. In the European session, USD/JPY is trading at 155.08, up 0.51% on the day. Bank of Japan Governor Ueda sent mixed signals about a rate hike in December, leaving investors unclear and sending the yen lower against the US dollar. Ueda said that the timing of a rate hike depended on economic conditions. He noted that there was progress towards sustained inflation from higher wages and consumption, but warned that there were “numerous uncertainties” that the Bank would have to monitor, such as the impact of President-elect Trump’s economic policies. Ueda said that the central bank wouldn’t wait for all uncertainties to clear up before a hike and that the timing would depend on the “economic, price and financial outlook”. The lack of clarity from Ueda wasn’t all that surprising as the BoJ is not transparent with its rate plans, which results in strong volatility whenever the BoJ makes a rate move. Ueda’s comments didn’t change market expectations, as the pricing of a rate hike in December is around 55%. A strong rise in inflation or a significant decline in the yen would support a rate hike at the December meeting. The week ended on a positive note as US retail sales were better than expected in October. Retail sales rose 0.4% m/m, better than the market estimate of 0.3% and the September reading was revised from 0.4% to 0.8%. Annually, retail sales posted a strong gain of 2.8%, up from an upwardly revised gain of 1% in September and blowing past the forecast of 1.9%. The strong data for September and October has lowered the odds of a rate cut in December, which are currently around 60%. On Thursday, prior to the retail sales report, Fed Chair Powell said that “the economy is not sending any signals that we need to be in a hurry to lower rates”. USD/JPY is testing resistance at 156.07. The next resistance line is 157.86 154.97 and 153.18 are the next support levels
by OANDA
Japan GDP beats forecast, yen ends skidThe Japanese yen is in positive territory today, putting the brakes on a four-day skid. In the European session, USD/JPY is trading at 155.54 down 0.45% on the day. Japan’s economy expanded by 0.9% in the third quarter, below the revised 2.2% gain in Q2 but above the market estimate of 0.7%. Quarterly, GDP rose 0.2%, lower than the 0.5% gain in Q2 and matching expectations. The GDP numbers were not sparkling but point to a second straight quarter of growth. August economic activity was dampened due to a “megaquake” alert and a fierce typhoon which caused widespread destruction and disruption. Private consumption, which comprises more than half of the country’s GDP showed strong growth of 3.6% y/y, despite the weather issues. This is an encouraging sign for the Bank of Japan, which wants to see inflation rise to demand and consumption. The BoJ has been vague about the timing of a rate hike but the markets are looking at December or January as likely dates. The yen has been wobbly and is down 2.3% in November. If the yen’s downswing continues, the BoJ could decide to hike rates at the Dec. 19 meeting. There is also the possibility of the Ministry of Finance intervening in the currency markets if the yen declines sharply. The US wraps up the week with retail sales for October, with a market estimate of 1.9%. Retails sales eased to 1.7% y/y in September, which was an 8-month low. Monthly, retail sales are expected to inch up to 0.4% from 0.3%. Consumer spending has been generally strong and consumer confidence should improve now that the uncertainty over the US election is over. USD/JPY has pushed below support at 1.5601 and is testing 1.5560. The next support line is 1.5493 1.5668 and 1.5709 are the next resistance lines
by OANDA
GBPJPY - Will the pound continue to weaken?The GBPJPY currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. If the correction continues to the support range, we can buy with a suitable risk reward. Breaking the resistance range will pave the way for this currency pair to continue its rise. Pension Reforms in the UK • Consolidation of Local Government Pension Schemes: Rachel Reeves, the UK Treasury Secretary, aims to merge local government pension schemes into larger funds (megafunds). This initiative involves pooling the assets of 86 local government pension schemes into a large fund managed by professional investment managers. • Objective: To increase investment in long-term, high-risk assets, reduce management costs, and strengthen investment in infrastructure and local areas. • Further Reforms: In addition, Reeves plans to make changes to financial arbitration services and the combined stock market, marking “the most significant pension reforms in decades.” Inflation Outlook and Interest Rates in the UK • Comments from Bank of England Member, Mann: Bank of England member, Mann, warned that substantial volatility in macroeconomic indicators will be seen in the coming years. He suggests that inflation may remain high for an extended period, necessitating a higher neutral rate. Additionally, he noted that lower interest rates compared to high inflation would put more pressure on investments. Japan’s Support Package and Economic Stimulus • Budget and Household Support: The Japanese government has planned a supplementary budget of 13.5 trillion yen (87 billion USD) to fund an economic stimulus package. This budget includes a payment of 30,000 yen to low-income households and 20,000 yen per child in households with children. • Energy Subsidies: The government will also reintroduce electricity and gas subsidies from January for three months to help households cope with rising fuel and service costs. Financial Risks and Supervision by the Bank of Japan • Concerns About Non-Bank Financial Institutions: The Bank of Japan’s Deputy Governor, Uchida, warned that increased connections between non-bank financial institutions and banks could pose risks to the entire financial system. He emphasized that non-bank institutions handle almost half of global financial intermediation, which requires close attention. Actions for Stability in Japan’s Currency Market • Currency Market Intervention: Japan’s Finance Minister, Katsunobu Kato, stated that appropriate measures will be taken to control severe and one-sided fluctuations in the currency market if necessary. He stressed the importance of sustainable exchange rate movements in line with fundamental principles.
Long
by Ali_PSND
USD/JPY hit 15-week high, Japan GDP nextThe Japanese is lower for a fourth straight trading day and has declined 2.1% during that time. In the North American session, USD/JPY is trading at 155.85 up 0.25% on the day. The markets are braced for a sharp slowdown in third-quarter GDP, which will be released early Friday. The market estimate stands at 0.7% y/y, compared to a revised 3.1% in the second quarter. On a quarterly basis, GDP is expected to ease to 0.2%, following a revised 0.7% gain in Q2. The strong GDP numbers in the second quarter reflected wage negotiations in the spring which resulted in sharp wage increases and a recovery in the auto industry. The BoJ meets next on Dec. 19 and key data such as the GDP release and inflation will be important factors ahead of the meeting. As well, wages have been rising which could translate into increased consumer spending and demand-driven inflation. In the US, the Producer Price Index (PPI) rose in October to 2.4% y/y, up from a revised 1.9% gain in September. The core rate also rose to 3.1% from a revised 2.9% in September. The increase in PPI comes on the heels of consumer inflation (CPI) which rose from 2.4% y/y to 2.6%. The core rate remained unchanged at 3.3%. The Federal Reserve is unlikely to change its plans due to the rise in inflation, which had decelerated for six straight months. The path of inflation can be bumpy and Fed policymakers won’t be losing sleep over a single monthly increase. If inflation accelerates next month, however, there will be some concern and we could hear calls for an oversized half-point cut in December. USD is testing resistance at 155.95. Above, there is resistance at 1.5643 There is support at 155.15 and 154.67
by OANDA
USDJPY - Will the yen continue to weaken?!The USDJPY currency pair is above the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. In case of correction due to the release of today's economic data, we can see the demand zones and buy within those two zones with the appropriate risk reward. John Thune, the senator from South Dakota, has been elected as the Republican Senate Majority Leader. This election received broad support from Trump-aligned Republicans, though some factions within the GOP, particularly the far-right, were less welcoming of the choice. In this race, Thune faced competition from John Cornyn of Texas and Rick Scott of Florida, although Scott was not seen as a significant threat. Thune ultimately won in a direct, closed-ballot vote against Cornyn, securing the Senate leadership position. Moody’s has announced that financial risks concerning the United States’ fiscal strength have escalated. In a statement, Moody’s highlighted the outlook on U.S. national debt, identifying the “decisive victory of Republicans” as a specific risk factor. Moody’s stated, “In the absence of policy measures to curb the budget deficit, federal fiscal strength will deteriorate, increasingly impacting the U.S. sovereign credit profile.” Given the fiscal policies promised by Trump during his election campaign—and the high likelihood of their passage due to the shift in Congress—U.S. fiscal strength-related risks have increased. While Trump’s victory has been seen as positive for certain risk assets, it has had negative implications for bonds. Meanwhile, a Bank of Japan official indicated that Japan is not currently in need of extensive financial support, allowing the central bank to resume interest rate hikes after a brief pause to assess U.S. economic developments. Another Bank of Japan member warned that raising rates could cause market shocks, disrupting the normalization path of Japan’s monetary policies, as the divergence in policy directions between the U.S. and Japan could heighten foreign exchange market volatility. Additionally, one member emphasized the need to be prepared for potential market fluctuations due to the U.S. presidential election results.
Long
by Ali_PSND
EUR/USD slips to 7-month low on weak eurozone confidence dataThe euro can’t seem to find its footing. EUR/USD is down for a third straight trading day and has declined 0.38% on Wednesday, trading at 1.0608 at the time of writing. Earlier today, the euro dropped as low as 1.0606, its lowest level since April 15. The US dollar rose after Donald Trump’s decisive election win, and the dollar is getting a boost as the Republicans are likely to win the House of Representatives. This would give the Republicans control of the House and the Senate and would make it easier for Trump to push through his agenda. The eurozone ZEW economic sentiment index fell in November to 12.5, down sharply from 20.1 in October and well short of the market estimate of 20.5. It was a similar story for the German ZEW release, which fell from 13.1 to 7.4, shy of the consensus of 13. Investors and analysts are pessimistic about the economic outlook for two reasons. First, the Trump victory could signal new tariffs on European products and even trigger a trade war, the last thing the weak eurozone economy can afford. The second concern is the collapse of the German government coalition, with a snap election called for Feb. 23. The European Central Bank meets next month and has signaled another reduction. ECB Governing Council member Olli Rehn said on Tuesday that a December cut is likely. The markets have priced in a reduction of 35 basis points in December, suggesting that traders are split on whether the ECB will opt for a cut of 25 or 50 basis points. There are differing opinions among the Governing Council members and we’re likely to see these opposing views aired in the coming weeks. EUR/USD tested support at 1.0614 earlier Below, there is support at 1.0572 There is resistance at 1.0671 and 1.0713
by OANDA
USD/JPY surges as Trump storms to victoryThe US dollar is on a tear against the major currencies after Donald Trump’s sweeping victory in the US presidential election. In the North American session, USD/JPY is trading at 154.62, up a massive 2.0% on the day. There are still plenty of votes to count in the US election but it looking increasingly likely that Republican Donald Trump has been re-elected as President. Trump and Democrat Kamala Harris were in a dead heat going into the election on Tuesday and there was concern that declaring a winner could take days or even weeks, which would have led to prolonged uncertainty. In what was a huge surprise to both sides, Trump cruised to victory. The win is even sweeter for the Republicans as they likely have won control of both the House of Representatives and the Senate. With the Republicans in charge, Trump’s agenda will be easier to push through Congress. It should be noted that at the time of writing, the vote count is incomplete and Harris has not conceded defeat. The US dollar has responded to the Trump win with sharp gains and the yen is in full retreat. Trump’s threats to slap stiff tariffs on China, Europe and Mexico would support the dollar, as tariffs would raise inflation and interest rates. If Trump’s policies lead to trade wars, market sentiment will fall, further boosting the dollar. The Bank of Japan released the minutes of its September meeting today. At the meeting, the BoJ kept rates at 0.25% and Governor Ueda said that BoJ would not rush to raise rates during market volatility. Those comments were a response to a stock market slide after weak US employment reports raised fears that the US economy was deteriorating much more quickly than expected. Those fears were unfounded and the markets don’t expect a BoJ rate hike before early 2025, although if the weak yen takes a dive, it could accelerate plans to raise rates. USD/JPY has pushed past resistance at 151.86, 152.87 and 153.84. The next resistance line is 153.95 150.78 and 149.77 are providing support
by OANDA
$JPINTR -Japan's Interest Rates (October/2024)ECONOMICS:JPINTR 0.25% October/2024 source: Bank of Japan - The Bank of Japan (BoJ) unanimously maintained its key short-term interest rate at around 0.25% during its October meeting, keeping it at the highest level since 2008 and matching market estimates. Thursday's decision came amid shifting political lansdscape following Japan's election and ahead of the US presidential election. In a quarterly outlook, the BoJ held its forecast that core inflation to reach 2.5% in FY 2024, with inflation expected to be around 1.9% for both FY 2025 and FY 2026. Regarding the GDP, the central bank retained its 2024 growth forecast at 0.6%. Additionally, it forecasts growth of 1.1% for FY 2025 and 1.0% for FY 2026.
ECONOMICS:JPINTR
by Mr_J__fx
USD/JPY eyes Bank of Japan meetingThe Japanese yen continues to have a quiet week. In the North American session, USD/JPY is trading at 153.25, at the time of writing, down 0.07% on the day. The Bank of Japan concludes its two-day meeting on Thursday and is widely expected to maintain policy settings, including its benchmark rate at 0.25%. The shock result from Sunday’s general election, which saw the ruling Liberal Democratic Party lose its majority, will means weeks of political uncertainty. The yen weakened to a three-month low after the election but that won’t be enough to prod the BoJ to raise interest rates on Thursday. The BoJ has said in the past that it would not make any rate moves during times of uncertainty, and between the political crisis in Japan and the tight election campaign in the US, it’s a sure bet that policymakers will wait before adjusting rates. The markets will be keeping a close eye on the BoJ’s quarterly inflation and growth reports, which will be released at the meeting. The BoJ has said that it will hike rates if the economy and prices move in line with these projections, so these projections could provide clues about the BoJ’s future rate path. Governor Ueda holds a press conference after the meeting, and a reference to the falling yen could signal plans for a rate hike or intervention in the currency markets in the near term. In the US, first-estimate GDP in the third quarter rose 2.8% y/y, down from 3.0% in Q2 and below the estimate of 3.0%. This points to a strong economy which has been boosted by robust consumer spending. The Federal Reserve meets on Nov. 7 and the markets have widely priced in a 25-basis point cut. USD/JPY is testing support at 153.33. The next support line is 152.80 153.92 and 154.45 are the next resistance lines
by OANDA
The yen falls to a three-month low amid political uncertainty in Japan's ruling party has faced a devastating defeat in the general election, leading to a surge of political uncertainty that has driven the yen to its lowest in three months. If PM Ishiba resigns and is succeeded by the dovish Sanae Takaichi as president of the Liberal Democratic Party, concerns about the BoJ's plan to raise interest rates will intensify. This scenario will signal that Japan may be losing its political and policy-stable status, resulting in a long-term stalemate in the Japanese stock market. USDJPY sustains a solid uptrend within the ascending channel, finding support around 153.00. The gap between both EMAs widens, sending out a bullish signal. If USDJPY breaches the resistance at 154.00 and then crosses the ascending channel’s upper bound, the price may continue its uptrend toward 157.80. Conversely, if USDJPY breaks EMA21 and the channel's lower bound, the price could fall further to the support at 150.80, where EMA78 coincides.
by inkicho_exness
Yen slips to 3-month low after Japanese electionThe Japanese yen is lower on Monday. In the European session, USD/JPY is trading at 152.63, up 0.22% at the time of writing. The yen weakened as far as 153.88 but has pared most of the losses. The new trading week has barely begun but the markets are busy digesting the drama out of Tokyo. The snap parliamentary election over the weekend was a disaster for new Prime Minister Shigeru Ishiba, as his Liberal Democratic Party (LPD) coalition won just 215 seats, short of the 233 majority. Ishiba has been in power for only a month and the snap election backfired as the LDP lost its parliamentary majority for the first time since 2009. It’s unclear if Ishiba will be able to cobble together a majority and the political uncertainly could push the yen, which is trading at 3-month lows, even lower. The election bombshell comes just ahead of the Bank of Japan’s on Oct. 31. The BoJ is expected to maintain policy settings and will release updated growth and inflation forecasts. The BoJ has intervened in the past when the yen showed a sharp and quick decline and there is speculation that the central bank might intervene if the yen falls to 155 or 160 per dollar. The US wrapped up the week with mixed results. Durable Goods Orders declined 0.8% in September, unchanged from a revised -0.8% reading in August and above the market estimate of -1%. The UoM Consumer Sentiment index improved slightly to 70.5 in October, above 70.1 in September, beating the market estimate of 69.0. USD/JPY continues to push through resistance lines. The next resistance line is 153.94 152.03 and 151.68 are providing support
by OANDA
Tokyo Core CPI complicates BoJ’s rate plansThe Japanese yen is showing limited movement on Friday. In the European session, USD/JPY is trading at 151.94, up 0.09%. Tokyo Core CPI, a leading indicator of inflation trends in Japan, fell to 1.8% y/y in October, down from 2% in September and just above the market estimate of 1.7%. This marked a second straight deceleration and was the lowest level since April. A key service inflation indicator also slowed in October, dropping from 2.7% to 2.6%, a four-month low. The decline in inflation is a disappointment for the Bank of Japan, which wants to see inflation remain sustainable around its 2% target before its raises interest rates on the path towards normalization. The BoJ meets next week and is expected to maintain rates. The central bank will release growth and inflation forecasts which could provide insights into future monetary policy. The cautious BoJ is unlikely to raise rates until early next unless inflation reverses its current downtrend and pushes higher. The US wraps up the week with core durable goods orders and UoM consumer sentiment. The manufacturing sector has contracted for four straight months and core durable goods orders are expected to fall 1% in September, after no change in August. The UoM consumer sentiment index is expected to fall to 68.9 in October, compared to 70.1 a month earlier. Consumers are unhappy about high inflation and there is uncertainty over the US election, with an extremely tight race between Donald Trump and Kamala Harris. USD/JPY is testing resistance at 1.5207. The next resistance line is 152.58 151.30 and 150.79 are providing support
by OANDA
Yen slides as IMF cuts Japan’s growth estimateThe Japanese yen has posted sharp losses on Wednesday. In the European session, USD/JPY is trading at 152.67, up 1.06% at the time of writing. The yen is down 2.1% this week and has plunged 6.3% in October. The International Monetary Fund slashed its 2024 growth forecast for Japan to just 0.3%, down sharply from the 0.7% forecast in June. This is the lowest estimate since 2020, during the Covid-19 pandemic which severely impacted the economy. The IMF highlighted the “fading of a one-off boost” in tourism and disruptions in auto supply chains. Japan’s economy grew 1.7% in 2023, aided by a strong increase in tourism. The IMF said it expects the economy to rebound in 2025 and expand 1.1% as private consumption and wage growth improve, assuming that the Bank of Japan continues to raise rates “toward a neutral setting of about 1.5%.” The BoJ raised interest rates out of negative territory in July to the current rate of 0.25%. The markets are expecting further hikes but the central bank has been very cautious and wants to see evidence of sustainable inflation at 2% before making additional hikes. This has made the BoJ an outlier among major central banks, most of which are in a rate-cutting cycle in response to falling inflation. Japan releases Tokyo Core CPI, a key inflation indicator, on Thursday. The indicator is expected to ease to 1.7% in September, down from 2% in August. The BoJ meets on Oct. 30-31, right after a general election on Oct. 27. The Bank will likely maintain policy settings but the markets will be keeping a close eye on the quarterly projections for inflation and growth. USD/JPY has pushed above several resistance lines today and the next resistance line is 153.19 150.93 and 150.66 are providing support
by OANDA
The yen is losing strength due to the strong dollar. The dollar continues to strengthen as a result of the robust US economy. Conversely, the yen's value is deteriorating due to uncertainty surrounding the BoJ's interest rate policy and the dovish stance of committee members. Last week's release of US September retail sales and unemployment claims data reaffirmed US’ strong spending power and solid job market conditions, eliminating any possibility of a 50bp cut. Fed Director Christopher Waller stressed the importance of exercising caution regarding additional rate cuts as the US economy continues to perform at a satisfactory level without any recession concerns. USDJPY rose sharply to 152.30 following a rebound at EMA78. The price sustains an uptrend within the ascending channel, indicating a bullish momentum. If USDJPY breaches the channel’s upper bound and the resistance at 153.70, the price may gain upward momentum toward 157.00. Conversely, if USDJPY breaks the support at 151.00, the price may fall further to 148.50, where both EMAs coincide.
by inkicho_exness
Japanese Stocks Have Room for More Upside?Do Japanese stocks have room for move upside? It has been one of the best-performing markets since COVID. And what is the key reason for this rally? A falling Yen. Where is the Yen heading and do the Japanese stocks have room for more upside? Nikkei (JPY) Futures Ticker: NIY Minimum fluctuation: 5.00 index points = ¥2500 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
CME:NIY1!Short
by konhow
1
NZDJPY breaks 200-day SMA; downward movement imminent?The New Zealand dollar to Japanese yen currency pair (NZD/JPY) saw an uptrend on the daily chart from March 2020 to July 2024, gaining 66.58% over the four-year period. Recently, however, the pair broke below the 200-day Simple Moving Average (SMA) on the daily chart, signaling a potential trend reversal. The 200-day SMA, which had served as support for four years, now appears to be acting as resistance. Additionally, the NZD/JPY formed a double top, indicating that buyers were once more unable to push the price above the 92.00 mark. This double top region coincides with the 50% level of the bearish Fibonacci. Upward trend in NZDJPY driven by RBNZ-BOJ interest rate differential The strong upward trend had been driven by the interest rate differential between the New Zealand dollar and the Japanese yen. New Zealand, like many countries around the world, slashed interest rates during the COVID-19 pandemic to stimulate its economy. However, as the economy began to recover, the Reserve Bank of New Zealand (RBNZ) moved to raise rates to control inflation and avoid rampant price increases. With inflation now under control, the RBNZ has started cutting rates, with yesterday marking the third consecutive cut, as the central bank reduced New Zealand’s key interest rate from 5.25% to 4.75%. Japan, on the other hand, followed the opposite path, keeping its interest rate below 0 while other countries raised borrowing costs to control inflation — which is why the JPY has depreciated so much in recent years. However, in its most recent meetings, the Bank of Japan (BOJ) — Japan’s central bank — changed its stance and raised interest rates for the first time since 2016. With New Zealand’s interest rate declining and Japan’s interest rate increasing, there is potential for a medium-term devaluation of the NZD against the JPY. Downward movement in NZDJPY possible in coming months From a technical perspective, the following factors are at play: 1. Break of the uptrend on D1. 2. The 200-day SMA, which previously acted as support, is now serving as resistance. 3. A double top has formed on the daily chart. 4. The 50% Fibonacci region is bearish. Considering these technical factors and the diverging monetary policies of the central banks in Japan and New Zealand, a downward movement in NZD/JPY is possible in the coming months. If the price manages to break below 89.75, it is possible that it will fall to the 86.70 region in a few days. Disclaimer: 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Short
by Marketscom
USDJPY Rebound Faces Pushback at Key ResistanceAfter the Fed’s jumbo pivot in September and aggressive easing path, Chair Powell adopted a more reserved approach at the start of the previous week. The cautious messaging was extrapolated at the end of that same week by the strong jobs report. Markets have now priced out bets for another outsized move, expecting 50 bps of cuts by the end of the year, in line with the Fed’s projections. At the same time, the Bank of Japan has shifted to a more patient approach to monetary tightening, after last month's hold, removing guidance for further hikes ahead. The August deceleration in wage growth adds a reason for caution, while the current political landscape does not favor aggressive tightening. With elections due later this month, the new Prime Minister does not see the need for more hikes. As a result of these developments, USD/JPY posted its best week of the year and extends its gains into the daily Ichimoku Cloud, testing the pivotal 38.2% Fibonacci. This creates scope for further recovery towards 151.90, but we are cautious about sustained advance as the upside is unfriendly technically and fundamentally. Inflation (ex-fresh food) in Japan has been rising for the past four months and remains above the 2% target for more than two years, wages are elevated and GDP posted strong growth in Q2. One more rate hike within the year is still reasonable and BoJ officials still see more tightening if the economy evolves as projected. Chair Powell may have struck a more cautious tone, but officials still expect another 150 bps of cuts by the end of next year, so the broader policy dynamics remains unfavorable for USD/JPY. The pair faces pushback at the 38.2% Fibonacci and rejection could send it back below the EMA200 (black line) and reaffirm the bearish bias. This would in turn create scope for new 2024 lows (139.57), although strong catalyst would be required. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”) (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
Japanese yen slides as political drama continuesThe yen is sharply lower on Wednesday. In the European session, the USD/JPY is trading at 144.82 at the time of writing, up 0.89%. In Japan, the dust is yet to settle on the political drama. On Tuesday, the new Prime Minister, Shigeru Ishiba, appointed Katsunobu Kato as finance minister. Kato is a supporter of “Abenomics” which advocates monetary easing. This could complicate the BoJ’s plans to tighten policy and the yen has responded with sharp losses today. Ishiba is on record for supporting a tighter policy but may have chosen Kato to ease concerns that Ishiba will make a significant shift in monetary policy with a snap election on October 27. The election will be followed by the next BoJ meeting on October 31, with the BoJ expected to maintain its policy settings. Manufacturing continues to sputter in both the US and Japan. The Japanese manufacturing PMI eased to a revised 49.7 in September, down from 49.8 in August and above the market estimate of 49.6. This was the third straight month of contraction in factory activity, with a strong decrease in export orders. Business confidence dropped to its lowest since December 2022, as manufacturers don’t see a light at the end of the tunnel for the troubled manufacturing sector. In the US, the ISM manufacturing PMI was unchanged in September at 47.2, below the market estimate of 47.5. The contraction in manufacturing has extended for six straight months. New orders decreased in September, demand remains weak and manufacturers face uncertainty over the Federal Reserve’s monetary policy and the upcoming US election. USD/JPY has pushed above resistance at 143.69 and 144.41. Above, there is resistance at 145.25 There is support at 142.85 and 142.13
by OANDA
USDJPY Analysis: Slightly Bullish Bias on 02/10/2024. As we head into the 2nd of October 2024, the USDJPY currency pair shows signs of a slightly bullish bias. Several key factors, including fundamental drivers and technical market conditions, support this outlook. Traders and investors looking for insights into the pair should consider the following factors influencing USDJPY today. 1. US Dollar Strength The US dollar has been supported by strong economic data coming out of the US, especially with the continued resilience in the labor market. The Non-Farm Payroll (NFP) report scheduled later this week is anticipated to reflect strong employment trends, which may lead to speculation that the Federal Reserve could maintain its hawkish stance on interest rates. This has kept the USD well-supported across the board, and USDJPY is no exception. Higher interest rate expectations typically benefit the USD, making it more attractive to investors seeking yield. 2. Bank of Japan’s Monetary Policy On the other side, the Bank of Japan (BoJ) remains committed to its ultra-loose monetary policy. With inflation in Japan still struggling to gain significant traction, the BoJ is unlikely to shift its dovish stance in the near term. The interest rate differential between the US and Japan continues to widen, favoring USDJPY bulls. This divergence in policy is one of the major contributors to the bullish sentiment in the pair. 3. Risk Sentiment and Safe-Haven Demand Global risk sentiment has improved slightly, leading to reduced demand for safe-haven assets such as the Japanese yen. The yen typically strengthens in times of market uncertainty, but with equities stabilizing and geopolitical tensions easing, there’s less of a need for safe-haven assets today. This reduces demand for the yen and lends support to USDJPY’s bullish outlook. 4. Technicals Pointing to Upside From a technical perspective, USDJPY has broken above key resistance levels in recent sessions. The pair is trading above its 50-day and 100-day moving averages, signaling strong upward momentum. Additionally, the RSI (Relative Strength Index) remains in neutral territory, allowing room for further upside without signaling overbought conditions. If USDJPY can hold above the 149.00 psychological level, further gains toward the 150.00 mark are possible. 5. Upcoming Economic Events While no major Japanese economic releases are expected today, traders should keep an eye on US data releases, particularly any statements from Federal Reserve officials. Any hawkish commentary could further fuel USDJPY’s bullish trajectory. Conclusion In summary, the fundamental and technical factors point toward a slightly bullish bias for USDJPY on 02/10/2024. The ongoing divergence between the Federal Reserve’s hawkish stance and the BoJ’s dovish policy, coupled with solid US economic data and improving risk sentiment, supports this outlook. Traders should remain mindful of any new developments in the US that could further impact the pair’s direction. Keywords for SEO Optimization: USDJPY analysis, USDJPY forecast, USDJPY bullish bias, US dollar strength, Bank of Japan monetary policy, BoJ, Federal Reserve interest rates, USDJPY technical analysis, USDJPY 02/10/2024, forex trading, USDJPY tradingview analysis, forex market outlook, USDJPY fundamental factors, US economic data impact on USDJPY, USDJPY price prediction. This article provides a comprehensive overview of the potential USDJPY movement today, offering valuable insights for forex traders looking to capitalize on the pair’s slightly bullish bias.
Long
by PERFECT_MFG
Japanese yen soars on Japan’s political dramaThe Japanese yen has steadied on Monday after posting huge gains on Friday. USD/JPY is trading at 142.43 in the European session, up 0.15%. The yen soared on Friday but it was in response to political rather than economic developments. The ruling Liberal Democratic Party (LDP) unexpectedly chose Shigeru Ishiba as its new leader and he will take over as Prime Minister on Tuesday. Ishiba’s win was a surprise as Economic Minister Sanae Takaichi was expected to win the LDP leadership race. The financial markets reacted sharply – the Japanese yen soared 2.1% on Friday while the Japanese stock market is sharply lower today. Takaichi is a strong supporter of lower interest rates while Ishiba favors the Bank of Japan’s moves towards normalization. Ishiba said today that he will call a snap election on October 27, which he is almost certain to win. Ishiba’s election would be a green light for the BoJ to continue tightening policy which would make the yen more attractive to investors. Overshadowed by the political drama was Monday’s Japanese data, which was a mix. Industrial production slid 3.3% m/m in August, after a 3.1% gain in July and well short of the market estimate of -0.9%. Yearly, industrial production declined 4.9%, compared to a 2.9% gain in July. There was better news from retail sales, which rose 0.8% m/m in August, up from 0.2% in July and a three-month high. Yearly, retail sales climbed 2.8%, up from a revised 2.7% in July and above the market consensus of 2.3%. Inflation remains under control and this was reiterated on Friday by the US Core PCE Price Index, the Fed’s preferred inflation indicator. The index rose 0.1% m/m in August, a three-month low. This was down from 0.2% in July and below the market estimate of 0.2%. Yearly, Core PCE ticked up to 2.7%, after three consecutive months at 2.6% and in line with expectations. USD/JPY tested resistance at 142.86 earlier. Above, there is resistance at 143.19 There is support at 142.26 and 141.93
by OANDA
Hedging Yen amid bullish Nikkei outlook? The Nikkei-225 is trading near 40,000 once more. The sharp decline in early August due to the BoJ rate hike has been swiftly reversed. The outlook for the Nikkei remains bullish with continued investor interest driven by market reforms as well as foreign investor interest. With the BoJ currently on pause and signalling no urgency to raise rates further, the Nikkei appears poised to retest its all-time high set in July. However, the significant influence of monetary policy on the Yen makes it advantageous to hedge a Nikkei position with a long Yen position. This approach offers similar upside potential while reducing downside risk. BOJ ON HOLD FOLLOWING FALLOUT FROM RATE HIKE The BoJ decided to maintain rates at 0.25% during its September 20 meeting. Their statement indicated that the economy is on a recovery path aligned with the BoJ's mandate, upgrading its assessment of consumption from a "resilient trend" in July to a "moderate increasing trend." Governor Ueda noted that the recent yen strengthening is reducing inflationary pressures, signalling positive trends for the economy in line with the BoJ's mandate. During the September 20 meeting, he reiterated that the BoJ would not raise rates amid market instability, which they attribute to recession risks in the U.S. This cautious approach likely results from the fallout after the BoJ raised rates to a 15-year high at its July 31 meeting. This decision triggered a sharp yen appreciation and a significant unwind of the yen carry trade, leading to a global decline in equities fuelled by fear. The Nikkei-225 dropped over 20% in the following week, erasing all gains made in 2024. MARKET STABILITY ANOTHER CONCERN FOR BOJ The BoJ's policy mandate focuses on achieving sustainable economic growth through wage growth and consumption while maintaining a stable 2% inflation rate. Under Governor Ueda's leadership, the BoJ aims for a neutral policy rate that is neither overly restrictive nor too accommodative, indicating that rates must increase from their current excessively loose levels. However, following the market reaction to the July 31 policy meeting, the BoJ faces an additional mandate: balancing its monetary policy trajectory with the risks of market volatility and its effects on business stability. This additional mandate introduces a complex variable into the BoJ’s monetary policy balancing act, making it prudent for the BoJ to wait and assess the effects of policy changes. As Governor Ueda stated during the policy announcement, "We can afford to spend some time in making a policy decision." The BoJ has two remaining policy meetings scheduled for 2024: October 30 and December 18. Following Governor Ueda's recent statement highlighting risks from market volatility, analysts unanimously agreed that September policy meeting would not result in a hike but majority still expect another hike by the end of the year. With the recent encouraging inflation prints, BoJ has room to hike rates towards the end of the year. PAUSE RATHER THAN HALT The decision to maintain rates may signal a pause rather than a halt to rate hikes. Governor Ueda indicated in an August parliamentary hearing that the BoJ would continue to raise rates if economic data aligns with expectations. With inflation around the target range, BoJ has room to raise rates further. Additionally, the recent election concluded with Shigeru Ishiba becoming the next Prime Minister. The former defense minister has backed the BoJ's rate hike strategy and expressed concerns about yen depreciation. His leadership may foster political support for further rate increases in Japan. Finally, recession fears in the US are subsiding with recent jobs data and GDP figures above expectations. This may help ease market instability concerns for the BoJ. JAPAN EQUITIES REMAIN COMPELLING, ATTRACTING INFLOWS Japan equities remain compelling for foreign investors. The TSE’s recent market reforms have led to a material improvement in the firm’s balance sheets with higher utilization of capital in the form of both returns to shareholders and capital expenditure. Furthermore, Japan equities remains undervalued despite the massive improvement in valuations this year. While, the P/B ratio for Nikkei-225 has increased from 1.75 to 1.93 over the past year, the P/E ratio has remained largely unchanged at 20.88 (compared to 19.38 last year). The much unchanged P/E ratio reflects the strong earnings growth despite the 23% rally in the index. The potential undervaluation has attracted global value investors including Warren Buffet. Warren Buffet has built up large positions in Japanese trading houses with the value totalling nearly USD 25 billion as of 12/June. Buffet has previously opted to increase stakes in these investments when they traded at P/E similar to the level during the downturn in August. Furthermore, YTD inflows into Nomura Nikkei 225 Fund (NTETF) have totalled USD 891 million. While the fund is only available OTC in the US, it is one of the largest Japan equity ETF with USD 71 billion in AUM. Notably, inflows into the ETF have been concentrated after large declines this year suggesting investors are using decline in price to increase positions. CHINA STIMULUS ADDS FURTHER WIND IN NIKKEI SAILS The announcement of the massive stimulus package in China last week has supported most Asian equity markets with the rising tide of Chinese equities rippling through Japanese equities. As the positive sentiment in China continues, other Asian indices are likely to benefit too. HYPOTHETICAL TRADE SETUP The Nikkei-225 is supported by strong tailwinds including market reforms that support foreign investment and a positive sentiment in Asia equities. However, given the market reaction to the previous BoJ rate hike, monetary policy and Yen moves remain a pertinent concern for the Nikkei. Nikkei and Yen are inversely correlated. The correlation is particularly tight during periods of Nikkei decline. With the Yen remaining volatile from the impact of monetary policy, hedging a long position in Nikkei-225 with a long position in the JPYUSD is prudent. A combined position of being long on both the Nikkei-225 and the Yen has delivered similar gains to a long position in the Nikkei-225 over the past three months. However, the combined position has also offered crucial downside protection, outperforming during periods of market decline. The Yen remains on an uptrend, supported by both a weakening dollar from Fed rate cuts and a strengthening yen from BoJ rate hikes. A position consisting of long CME Nikkei (USD) futures can be combined with a position consisting of 2 x long CME Japanese Yen futures to roughly balance notional across both legs. Investors can also deploy 21 x long CME Micro JPY/USD futures to balance notional more closely. CME provides margin offset amounting to 35% as of 27/Sept for this trade which reduces margin requirements from USD 18,720 to USD 12,168. A hypothetical trade setup consisting of long 1 x CME Nikkei (USD) December futures and long 21 x CME Micro JPY/USD December futures offering reward to risk ratio of 1.43x is provided below. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme . DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME:NKD1!Long
by mintdotfinance
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