USD/JPY Forecast and News
USD/JPY extends the rally above 156.00, eyes on US PPI data
The USD/JPY pair extends the rally around 156.20 during the early Asian trading hours on Tuesday. The Japanese Yen loses ground against the US Dollar despite the hawkish signal from the Bank of Japan to cut purchases of Japanese government bonds on Monday and the downbeat Nonfarm Payrolls for April last week.
Latest Japanese Yen News
USD/JPY Technical Overview
USD/JPY has been slow to recover ground, but progress has been notably one-sided as the pair drifts higher, climbing over the 200-hour Exponential Moving Average (EMA) near 155.36. The pair is testing into chart territory north of the 156.00 handle, and is up nearly 3% from the last post-Yentervention bottom below 152.00.
USD/JPY is on pace to close in the green for a fifth out of the last six trading days after a sharp decline from multi-year highs above 160.00. The long-term bullish uptrend remains firmly intact, with bids trading well above the 200-day EMA at 148.29.
Fundamental Overview
USD/JPY broke above the 156.00 handle on Monday as markets continue to chew through Japanese Yen (JPY) gains following a pair of suspected “Yenterventions” from the Bank of Japan (BoJ) at the end of April and beginning of May. The BoJ has remained tight-lipped on the matter, refusing to officially confirm or deny direct intervention in global markets on behalf of the Yen. Still, BoJ financial operations reported overspending on forecast expenditures by around nine billion Yen the same week the JPY recovered 4.5% against the US Dollar (USD).
Markets will be focusing squarely on US inflation figures due this week,though Japanese Gross Domestic Product data is due early Thursday. Markets are broadly expecting Japanese GDP growth to contract, forecast to print at -0.4% in Q1 compared to the previous quarter’s 0.1%.
US Producer Price Index (PPI) inflation is slated for Tuesday, with Core PPI inflation expected to hold steady at 2.4% YoY in April. Wednesday’s US Consumer Price Index (CPI) inflation is expected to hold steady at 0.4% MoM in April, with YoY headline CPI inflation expected to tick down to 3.4% from 3.5%.
Despite a recent parade of policymakers from the Federal Reserve (Fed) voicing caution about markets hoping for rate cuts at a faster pace and sooner than the Fed can achieve, market hopes are still pinned firmly on two Fed cuts in 2024, with the first broadly expected to come in September. According to the CME’s FedWatch Tool, rate markets are pricing in nearly 90% odds of a rate cut in 2024, with 65% odds of a 25-basis-point cut in at the Fed’s September rate meeting.
USD/JPY Big Picture
USD/JPY Bullish Themes
USD/JPY Bearish Themes
Latest JPY Analysis
Editors' picks
EUR/USD finds thin gains on Monday, but technicals weigh heavy ahead of US inflation updates
EUR/USD found slim upside on Monday, climbing from early bids near 1.0770 but bullish momentum remains limited with the pair struggling to break above the 1.0800 level.
GBP/USD maintains its bid bias around 1.2560
GBP/USD keeps its auspicious start to the week well and sound and navigates the upper end of the range near 1.2560 on the back of the resumption of the selling bias in the US Dollar.
USD/JPY extends the rally above 156.00, eyes on US PPI data
The USD/JPY pair extends the rally around 156.20 during the early Asian trading hours on Tuesday. The Japanese Yen loses ground against the US Dollar despite the hawkish signal from the Bank of Japan to cut purchases of Japanese government bonds on Monday and the downbeat Nonfarm Payrolls for April last week.
Gold loses its bright amid mixed market mood
Gold prices retreated sharply on Monday from near $2,350 even though US Treasury yields declined, undermining appetite for the Greenback. Traders brace for a busy economic docket in the United States. The XAU/USD trades around $2,336, down 1% amid a risk-on impulse.
Oil prints small uptick while Greenback eases
Oil trades around $78.00 after a failed attempt to snap above $80.00 on Friday. More criticism emerges globally towards Israel and its offensive into Gaza. The US Dollar Index steadies around 105.30 ahead of US CPI data later this week.
Majors
Cryptocurrencies
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USD/JPY YEARLY FORECAST
How could USD/JPY move this year? Our experts make a USD/JPY update forecasting the possible moves of the yen-dollar pair during the whole year.
USD/JPY FORECAST 2024
The Japanese Yen could receive support from the BoJ if it indicates a shift toward ending its ultra-loose monetary policy stance, potentially through a rate hike that would mark the end of seven years of negative rates. Governor Ueda and Deputy Governor Hino offered some comments about it in December. Rumors and speculations in that direction would trigger momentum for the Yen. Read more details about the forecast.
The divergence in monetary policy between the Federal Reserve and the Bank of Japan led the pair to test the multi-decade high near 152.00.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR USD/JPY
There is a possibility that the BoJ might end its negative interest rate policy (NIRP) by raising the key rate to 0.00% in 2024. Some analysts anticipate the eventual end of YCC by January, while others believe it is more likely to occur during the second quarter. A significant challenge for the BoJ is to exit from NIRP without disrupting the economy.
Governor Kazuo Ueda has emphasized that any move will be carefully calculated, and the central bank will likely prepare the market for a change. This scenario is more likely to materialize if inflation in Japan remains above 3%.
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
The Bank of Japan (BOJ)
The Bank of Japan is the central bank of Japan and it's a juridical person established based on the Bank of Japan Act, nor being a government agency either a private corporation. The most important missions of the BOJ are the following: to issue and manage banknotes, to implement monetary policy and to ensure stability of the financial system. Almost all of the decisions are taken by the Policy Board, formed by a bunch of members working to provide currency and monetary control and setting the next moves that the central bank will take.
BOJ Official Website and on Twitter
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Kazuo Ueda
Kazuo Ueda is the 32nd and current Governor of the Bank of Japan. He is a professor and the dean of the business department at Kyoritsu Women's University in Tokyo and the external director at JGC Holdings Corp, an engineering company and at the state-owned Development Bank of Japan. The 71-year-old is widely seen as an expert on monetary policy but is seen as a surprise appointment by analysts. He was not even considered a dark-horse candidate. Ueda wasn’t really on their radar because the BOJ governor job has traditionally been assumed by a long-serving Finance Ministry bureaucrat or central bank official.
Ueda on Wikipedia's Profile
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
About USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low-interest rate and is normally used in carrying trades. This is the reason why is one of the most traded currencies worldwide. In this pair, the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from the United States of America) and Japanese economies.
Trading this currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from the United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the United States and the United Kingdom affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.