- The Japanese yen rose to a four-month high against the US dollar after Bank of Japan Governor Ueda’s remarks on Thursday.
- A recovery in US Treasury yields pushed the US dollar higher, with USD/JPY able to find support near the mid-142.00 yen on Friday.
- Further recovery is unlikely ahead of the important US NFP report due to the divergence between the Bank of Japan and the Federal Reserve’s policy expectations.
The Japanese yen (JPY) struggled to sustain its intraday gains against the US dollar (USD), pushing the USD/JPY pair above the 144.00 mark in early European time on Friday. Following a rebound from the previous day’s two-week high, the US dollar (USD) regained positive traction as US Treasury yields further recovered. On the other hand, the downward revision of Japan’s third-quarter GDP, along with the overall positive risk tone, has been found to be another factor that undermines the safe-haven yen and supports the majors.
However, upside potential for the USD/JPY appears to be limited amid speculation that the Bank of Japan (BOJ) will scale back its ultra-dovish, stimulus-focused policies in 2024. Indeed, Bank of Japan Governor Kazuo Ueda emphasized the need for this on Thursday. He vowed to continue accommodative monetary policy in the short term and talked about options while moving away from negative interest rates. Ueda’s comments reaffirmed market speculation that a change in the Bank of Japan’s policy stance was imminent. Separately, expectations from a dovish Federal Reserve (Fed) should weigh on the US dollar and provide a headwind.
Traders may also prefer to take a wait-and-see approach ahead of Friday’s release of the closely watched U.S. monthly jobs report, commonly known as the Nonfarm Payrolls (NFP) report. do not have. Investors will be looking for clues that the historically tight U.S. labor market is easing. If that happens, the Fed could be forced to begin monetary easing as early as March 2024. Nevertheless, data will play an important role in influencing short-term USD price trends. And it has provided meaningful stimulus to the USD/JPY pair, keeping it on track for three consecutive weeks of losses.
Daily digest market movements: Japanese yen falls to the lower end of the daily range against the US dollar, lack of follow-through
- The Japanese yen posted its biggest single-day gain against the dollar on Thursday, reacting to Bank of Japan Governor Kazuo Ueda’s subtly hawkish message about ending ultra-easy monetary policy.
- Mr. Ueda pointed out that the spring wage negotiations could be a turning point in policy, asking Prime Minister Kishida to ask the central bank whether wages will rise sustainably and whether rising wages will push up service prices. He said he would like to find out.
- Mr. Ueda earlier said that the situation has not yet been reached where the price target can be achieved sustainably, stably and with sufficient certainty, noting that economic stimulus measures are supporting Japan’s economy.
- Domestic economic data released on Friday showed Japan’s economy contracted by 2.9% year-on-year in the third quarter, a worse pace than the 2.1% decline initially expected, adding some momentum to the USD/JPY pair on Friday. It became a supporting material.
- On a quarterly basis, Japan’s GDP contracted by 0.7% from July to September, compared with the initially reported 0.5% decline and the median forecast of a 0.5% decline.
- Benchmark 10-year U.S. Treasury yields have moved away from three-month lows, contributing to a recovery in demand for the dollar and helping the dollar/yen pair pare some of its losses in Asian trading.
- A widespread perception that the US Federal Reserve (Fed) may end its interest rate hikes and begin easing policy by early 2024 would put a ceiling on the USD and create alarm for USD/JPY bulls. It will be necessary.
- For some meaningful stimulus, investors are now looking forward to the key US NFP report, which is expected to show the economy added 180,000 jobs in November and the unemployment rate held steady at 3.9%. I have to.
Technical Analysis: USD/JPY struggles to capitalize on intraday recovery above 144.00 mark
From a technical perspective, spot prices on Thursday showed resilience below the 61.8% Fibonacci retracement level of the July-November bull market and the all-important 200-day simple moving average (SMA). Ta. However, the USD/JPY pair has so far struggled to accept numbers above 144.00, which should be an important key point for short-term traders. The Relative Strength Index (RSI) on the daily chart indicates an oversold situation, and if the strength above it persists, it could trigger a rise in short covering and the USD/JPY pair could regain the psychological mark of 145.00. There is sex.
On the flip side, the 143.00 mark now appears to be protecting the immediate downside ahead of an Asian trading low near the mid-142.00s, which coincides with the 61.8% fibo. level. This is followed by the 200-day SMA, which is currently near the 142.30 area, the 142.00 mark, and the multi-month low touched the day before in the 141.60 area. Some follow-through selling will be seen as another trigger for bearish traders and the USD/JPY pair will likely extend its downward trajectory further towards the 141.00 mark on its way to the 140.80-140.75 zone.
Today’s Japanese yen price
The table below shows the percentage change of the Japanese Yen (JPY) against major listed currencies today. The Japanese yen was the weakest against .
| USD | EUR | GBP | CAD | australian dollar | JPY | new zealand dollar | Swiss franc | |
| USD | 0.04% | 0.16% | -0.11% | -0.23% | -0.21% | 0.15% | -0.10% | |
| EUR | -0.06% | 0.11% | -0.17% | -0.29% | -0.28% | 0.08% | -0.15% | |
| GBP | -0.16% | -0.12% | -0.30% | -0.39% | -0.40% | -0.02% | -0.24% | |
| CAD | 0.11% | 0.15% | 0.28% | -0.12% | -0.03% | 0.25% | 0.00% | |
| australian dollar | 0.20% | 0.28% | 0.40% | 0.10% | -0.01% | 0.37% | 0.16% | |
| JPY | 0.22% | 0.29% | 0.42% | 0.10% | 0.01% | 0.42% | 0.15% | |
| new zealand dollar | -0.13% | -0.11% | 0.02% | -0.25% | -0.38% | -0.39% | -0.22% | |
| Swiss franc | 0.07% | 0.10% | 0.22% | -0.06% | -0.18% | -0.15% | 0.20% |
The heat map shows the percentage change between major currencies. The base currency is selected from the left column and the quote currency is selected from the top row. For example, if you select Euro from the left column and move along the horizontal line to Japanese Yen, the percentage change displayed in the box represents EUR (base)/JPY (estimate).
economic indicators
US non-farm employment
The Nonfarm Payrolls release shows the number of new jobs created in all nonfarm sectors in the United States over the past month.it is released by US Bureau of Labor Statistics (BLS). Changes in your monthly salary can be very volatile. This figure is also subject to severe evaluation, which can also cause volatility on the forex board. In general, previous month reviews and unemployment rates are as relevant as headline numbers, with higher numbers considered bullish for the US dollar (USD) and lower numbers considered bearish. Therefore, the market’s reaction will depend on how the market evaluates all the data contained in the BLS report as a whole.
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The US monthly employment report is considered the most important economic indicator for Forex traders. Changes in the number of positions, published on the first Friday following the reporting month, are closely correlated with the performance of the overall economy and are monitored by policymakers. Full employment is one of the responsibilities of the Federal Reserve, which takes into account labor market trends when making policy decisions and therefore influences the currency. Even though several leading indicators shape the forecast, nonfarm payrolls tend to surprise the market and cause wide fluctuations. If the actual numbers are above the consensus, the USD tends to be bullish.
