BoJ

The technical bias in USD/JPY will remain to the upside as long as it remains above the 146.00 level.

Shinichi Uchida, Deputy Governor of the Bank of Japan (BOJ), says the bank won’t hike interest rates when markets are unstable, delivering a clear message on what traders need to do to prevent them doing so again: create volatility.

Wednesday was a day of divergent policies that saw the Bank of Japan (BOJ) hike rates more than expected and the Fed signal a cut. And that saw the US dollar and yen broadly move their separate ways.

The Japanese yen is behaving like a classic risk-on-risk-off currency again, often moving in line with other risker asset classes. With interest rate decisions from the Bank of Japan (BOJ) and Federal Reserve (Fed), along with earnings from tech giants Apple, Microsoft, Meta and Amazon to navigate, it promises to be another volatile week for USD/JPY again.

USDJPY Forecast: the anticipation of a tighter monetary policy at the next BOJ meeting has dominated oversold pressures on the USDJPY. Is there a reversal on the horizon?

Harris replacing Biden may not be a radical overhaul where policies are concerned, but it has certainly brought the Democrat’s prospects for maintaining power back from the brink of death. From a market perspective, it means Trump is no longer a ‘walk in’ President, and political headlines from the US are no longer driving sentiment for now. Thankfully, we have intertest rate decisions from the FOMC, BOE and BOJ to drive sentiment, along with NFP and Australia’s CPI report for good measure.

USDJPY Forecast: The US Dollar index steadies above 104 given an uncertain political atmosphere, but the USDJPY dips back near monthly lows amid monetary tightening expectations.

USDJPY Forecast: With the market fully pricing in a Fed rate cut starting in September, along with increasing speculations over a BOJ rate hike at the end of July, the USD/JPY is experiencing a sharp decline.

USD/JPY remains in a bullish technical posture, with potential for a retest of 160.00 unless the BOJ changes course no interest rates.

Be it headline or underlying price pressures, both are experiencing deep disinflation, casting doubt over the ability for the Bank of Japan to deliver more than the one rate hike already delivered.

With Nvidia’s first quarter earnings report helping to boost investor sentiment and interest rate differentials between the US and Japan remaining at historically elevated levels thanks to continued delays to rate cuts from the Fed, USD/JPY continues to drift higher for the moment.

USD/JPY is bouncing between two previous supposed “lines in the sand” for Japan’s Ministry of Finance at 152.00 and 155.00, but the risks may be tilted to more upside from here.

Japanese officials had been warning for months that speculative moves in the Japanese yen would not be tolerated without elaborating on what exactly constituted a ‘speculative’ move. We may have just been provided the answer.

It was supposed to be a quiet day with Japan on a public holiday. Yet the initial rally to 160 may have irked central authorities enough to ditch their supposed day off, intervene and send USD/JPY 400-pips lower.

If Japan’s Ministry of Finance (MOF) was looking for a trigger to instruct the Bank of Japan (BOJ) to intervene in currency markets, they were just provided a big one. Expect heightened near-term volatility in USD/JPY on Monday.

155 has become the latest 'glass ceiling' for the rapid rise of USD/JPY. And with a key US inflation report, BOJ meeting and potential for risk-off sentiment next week, this key level could be tested and prompt a response from Japan's central authorities.

For USD/JPY, the next test to watch will be at 155.00, and if the MOF/BOJ fail to act if USD/JPY breaches that level, traders may start to turn their eyes up to 160.00 next