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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
Why Morgan Stanley and MUFG back JPY? Morgan Stanley and MUFG both see the Japanese yen as the strongest G10 currency in 2025. They expect it to gain value as U.S. interest rates fall and Japan’s central bank raises its own. On the daily chart, USD/JPY oscillators are still away from being in the oversold zone, suggesting that the path of least resistance could to the downside. MUFG predicts further yen gains, especially against the euro, and has set a target of 150 for EUR/JPY, down from 157. Morgan Stanley also favors the Australian dollar. Meanwhile they believe the New Zealand dollar will appreciate but underperform the Australian dollar due to a weaker domestic outlook.
by BlackBull_Markets
Yen eyes US payrolls, Japan household spending jumpsThe Japanese yen is in negative territory on Friday.  This follows a two-day rally which saw the  yen jump  1.9% and hit a three-month high.  In the European session, USD/JPY is trading at 151.94, up 0.39% on the day.  On the data front, Japan's household spending was much stronger than expected and the US releases nonfarm payrolls. Japan's household spending has been struggling as inflation remains relatively high.  This made the December report a pleasant surprise, as household spending was much higher than expected.  Annually, household spending climbed 2.7%, crushing the market estimate of 0.2% and rebounding from -0.4% in November.  The monthly gain of 2.3% followed the November reading of 0.4% and beat the market estimate of -0.5%. Household spending was the strongest since Aug. 2022, driven by strong wage gains. However, it is questionable whether the impressive gain is a temporary blip, given that the December wage growth was largely driven by bonuses.  Still, real wages (adjusted for inflation) rose for a second straight month in December, which supports the case for the Bank of Japan to continue raising interest rates.  BoJ policy makers have been unusually candid about plans to raise rates, although the timing is uncertain, with May or August strong possibilities for the next rate hike. The US wraps up the week with nonfarm payrolls, one of the most important economic events.  The market estimate stands at 170 thousand for January, after a surprisingly strong gain of 256 thousand in December.  If the January forecast is accurate, it would mark a sharp drop that would make headlines, but is close to the past three-month average. The Federal Reserve won't be worried if job creation slows as long as the labor market is cooling at a slow pace.  The Fed is expected to cut rates only once or twice this year, but that could change if inflation or the labor market provide any surprises. USD/JPY is testing resistance at 151.86.  Next, there is resistance at 152.48 150.83 and 150.21 are the next support levels
by OANDA
USDJPY - BoJ Interest Rate Decision?!Here is our in-depth view and update on USDJPY . Potential opportunities and what to look out for. This is a long-term overview on the pair sharing possible entries and important Key Levels. Alright first, let’s take a step back and take a look at USDJPY from a bigger perspective. For this we will be looking at the H4 time-frame . USDJPY is currently trading at around 155.800 . Our scenarios are in play after the BoJ (Bank of Japan) Interest Rate Decision is out. Let’s take another look at them with more in-depth outcomes. These scenarios are written from just a TA (Technical Analysis) point of view. Scenario 1: BUYS -We broke above 156.700 . With the break of 156.700 we can expect a possible move up to 158.748. With a a further break of this KL (Key Level) we can expect more upside on the pair potentially reaching top of the long-term range sitting at 161.820. Scenario 2: SELLS -We broke below 154.881 . If we break bellow 154.881 we can expect more downside on the pair even up to 152.000. With breaks of this level we could see even lower levels sitting at around 149.394 or “bottom of the long-term range”. IMPORTANT KEY LEVELS: - 161.820; top of the long-term range - 158.748; breaks above would result in more upside - 154.881; breaks below would result in sells - 152.817; breaks below confirming lower levels - 152.030; breaks below confirming lower levels - 149.394; bottom of the long-term range Personal opinion: It’s not advised to enter into sells or buys before we have a clear break or the BoJ Interest Rate Decision data out. For now we are patiently waiting on either breaks to the upside or breaks to the downside. More volatility on the pair is expected tomorrow so be careful. KEY NOTES - USDJPY breaking above 156.700 would confirm buys. - USDJPY breaking below 154.881 would confirm sells. - BoJ Interest Rate Decision is tomorrow. Happy trading! FxPocket
by FxPocket
1
$GBPUSD DOLLAR EDGES UP, STERLING DIPS & YEN STEADIESDOLLAR EDGES UP, STERLING DIPS & YEN STEADIES 1/7 Dollar’s on a slight uptick today but still near recent lows. 💵🔎 All eyes are on upcoming U.S. economic data—could it shake the greenback out of its range? 2/7 Sterling falls as traders brace for a possible Bank of England rate cut. 💷❓ Recent economic signals point toward a policy adjustment—markets are watching closely! 3/7 The yen hit an 8-week high overnight after a BoJ board member hinted at further rate increases. ⬆️🇯🇵 But it pulled back in European trade, settling into a steady groove. 4/7 Why the mild dollar strength? 1️⃣ Easing trade war fears 2️⃣ Anticipation of Friday’s big U.S. data drop Investors remain cautious, but a surprise on the data front could shift sentiment fast. 5/7 Sterling’s dip reflects the BoE’s potential pivot. 👀💼 A rate cut could lower borrowing costs, but also typically pressures a currency downward. 6/7 Which currency do you think will see the biggest move after the BoE decision? 1️⃣ Dollar 2️⃣ Sterling 3️⃣ Yen 4️⃣ Something else? Vote below! 🗳️👇 7/7 Uncertain times call for tight risk management! ⚠️💹 Currency markets hinge on central bank signals—stay vigilant and nimble with your trades.
Long
by DCAChampion
1
Will USDJPY continue its decline amid hawkish tones from BoJ?Macro: - The yen reached a multi-week high due to more hawkish expectations from the BoJ. Japan's December real Wage rose in the second month, driven by winter bonuses. - The Japan Service PMI was revised to 53. In addition, the BoJ signalled that it would be willing to raise interest rates when conditions met. Technical: - USDJPY dropped below both EMAs after breaking the ascending trendline, indicating strong bearish momentum. - If USDJPY continues to decline, the price may retest the support at 152.00. - Meanwhile, USDJPY may correct to retest its EMA21 area before resuming its downward movement. Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
Short
by DatTong
5
Tokyo core inflation hits one-year high, yen lowerJapan's Tokyo's core inflation rate accelerated to 2.5% y/y in January, up from 2.4% in December and in line with market expectations. This marked the highest level since February 2024 and reflects rising inflationary pressure. Tokyo CPI jumped to 3.4% y/y, its highest in almost two years, as food prices rose sharply. Tokyo core CPI is closely monitored by Bank of Japan policymakers and supports last week's central bank decision to raise interest rates by a quarter point to 0.50%. The current cash rate is far below other central banks but is the highest in Japan since the global financial crisis in 2008.The Japanese yen has reversed directions on Friday and has edged lower. In the European session, USD/JPY is trading at 154.73, up 0.28% on the day. At the meeting, the BoJ revised higher its inflation forecasts and also hinted at further rate hikes. Deputy Governor Himino echoed this stance earlier this week, stating that the BoJ would consider further hikes if economic and inflation data continued to move in accordance with the Bank's projection. This flurry of hints about rate hikes is unusual for the BoJ, which tends to reveal little and keep speculators in the dark about its rate plans. This secretive approach often results in sharp volatility from the yen after BoJ meetings, and Bank policymakers may be looking to avoid further sharp swings from the yen. It seems clear that further rate hikes are a question of time as the BoJ moves forward, albeit cautiously, towards normalization. The BoJ meets next on March 19 and investors will be looking for more clues about a possible rate hike at that time. USD/JPY has pushed above resistance at 154.48. Next, there is resistance at 155.16 153.59 and 152.91 are the next support levels
by OANDA
BoJ hikes rates, yen pares gainsThe Japanese yen gained as much as 0.8% earlier today but has failed to consolidate these gains. In the European session, USD/JPY is trading at 156.03, dwon 0.02% on the day. The Bank of Japan hiked its policy rate by 25 basis points earlier today, as expected. This brings the policy rate to 0.5%, its highest level since October 2008, during the global financial crisis. The Japanese yen climbed sharply after the decision but was unable to consolidate these gains. The BoJ has been signaling that it planned to raise rates at today's meeting, although the BoJ tends to surprise the markets and a rate hike, while expected, was not a given. The BoJ statement expressed hope that this year's wage negotiations would result in strong wage increases, as was the case last year. Governor Ueda has said in the past that he would raise rates provided that inflation was driven by higher wages, which would show that inflation was sustainable. Wage growth has been moving higher and this resulted in today's rate hike. Japan's inflation rate has been moving higher and the December inflation report, which came out today, showed core CPI climbed to 3%, up from 2.7% in November and in line with the market estimate. The core rate has hovered above the BoJ's 2% target for 2.5 years and at today's meeting, the BoJ upgraded its inflation outlook to above 2% until 2026. Predictably, Governor Ueda didn't provide a timeline for the next rate hike at his post-meeting press conference, but a May rate hike is on the table if the wage negotiations result in higher wages and inflation does not weaken unexpectedly. Another key factor in the timing of the next rate hike will be President Trump's trade policy. Trump had promised to levy tariffs on US trading partners on his first day in office but has delayed the tariffs until at least Feb. 1. The BoJ will want to see which direction Trump's trade policy is going before raising rates again. There is support at 154.78 and 153.27 156.49 and 158.00 are the next resistance lines
by OANDA
Trump, BOJ could be the ideal divergent theme for USD/JPY bearsWe've just seen the BOJ deliver a hawkish hike, where they upgraded their inflation forecasts and cited rising wage pressures. This leaves the door open for further hikes this year. Meanwhile, Trump is now trying to strongarm the Fed and global central banks to lower interest rates immediately. Together, this is the ideal divergent theme currency traders crave. And the icing on the cake for USD/JPY bears would be if Trump begins his attack on a strong USD (which I think he will). Matt Simpson, Market Analyst at City Index and Forex.com
Short
by CityIndex
1
Bank of Japan expected to raise rates, yen calmThe Japanese yen is slightly lower on Thursday. In the European session, USD/JPY is trading at 156.25, down 0.16% on the day. All eyes are on the Bank of Japan, which meets early on Friday. The BoJ is expected to raise interest rates by 25 basis points which would bring the cash rate to 0.50%. The BoJ has said that it will raise rates if it sees higher wage growth, which would indicate that inflation is sustainable. BoJ policymakers have expressed confidence that wages are moving higher and Deputy Governor Himino said last week that many firms plan to raise wages at least as much as last year. Investors will be keeping a close eye on the BoJ's rate statement. The tone of the statement could be dovish as BoJ policymakers are concerned about President Donald Trump's threats to levy trade tariffs as early as Feb. 1, a move which could destabilize the financial markets. The BoJ will have to be cautious as it gauges the 'Trump factor". Another factor supporting a rate hike is the poor performance of the Japanese yen, which has declined around 9% in the past three months. The Federal Reserve is sounding more hawkish and might raise rates only once or twice this year. If the BoJ stays on the sidelines again, the yen could fall further. Overshadowed by the BoJ meeting, Japan releases December core CPI. Japan's core inflation rate has been climbing higher and is expected to climb to 3% y/y, up from 2.7% in November which was a three-month high. The core rate, which is closely watched by the BOJ, has hovered above the central bank's target of 2% for over two years. USD/JPY is testing support at 156.20. Below, there is support at 155.68 157.04 and 157.56 are the next resistance lines
by OANDA