The Japanese Yen (JPY) is facing downward pressure against the US Dollar (USD) as safe-haven flows may mitigate some of the losses. This trend is influenced by escalating geopolitical tensions in the Middle East.
Japan’s parliament is set to convene a special session on August 23 to deliberate on the Bank of Japan’s (BoJ) recent interest rate hike. The session will involve BoJ Governor Kazuo Ueda and is organized by the lower house financial affairs committee.
Amidst reduced expectations for a 50 basis points cut by the US Federal Reserve (Fed) in September, the USD/JPY pair is receiving support. CME’s FedWatch Tool indicates a 50% probability of the rate cut, down from 85% last week. However, markets are still anticipating at least a 25 bps cut at the upcoming meeting.
Insights into Market Dynamics: Japanese Yen Weakening as Fed Rate Cut Possibility Declines
- Fed Governor Michelle Bowman’s comments suggest a reluctance to cut rates in September, citing positive inflation and labor market conditions.
- JP Morgan Asset Management anticipates no near-term rate hikes by the BoJ unless the Fed cuts rates and the US economy stabilizes. They project potential tightening in 2025 under stable global economic conditions.
- The BoJ’s Summary of Opinions from the recent Monetary Policy Meeting indicates satisfaction with economic progress and a target neutral rate of “at least around 1%.”
- BoJ Deputy Governor Shinichi Uchida emphasizes flexibility in interest rate strategy based on market volatility and economic impacts.
- Rising import prices due to JPY depreciation pose inflation risks, as noted in the Bank of Japan’s June meeting minutes.
Technical Analysis: USD/JPY Testing Key Levels
USD/JPY is currently hovering around 147.40, below the nine-day Exponential Moving Average (EMA), indicating a bearish trend in the short term. The RSI suggests potential for correction, with support levels at 141.69 and 140.25, and resistance at the nine-day EMA at 147.72.
USD/JPY: Daily Chart
Japanese Yen PRICE Today
Check out the percentage change of Japanese Yen (JPY) against major currencies today. JPY showed weakness against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.06% | -0.06% | 0.12% | -0.04% | -0.10% | 0.24% | 0.04% | |
| EUR | 0.06% | -0.01% | 0.18% | -0.02% | -0.06% | -0.21% | 0.10% | |
| GBP | 0.06% | 0.00% | 0.19% | 0.01% | -0.05% | -0.18% | 0.14% | |
| JPY | -0.12% | -0.18% | -0.19% | -0.20% | -0.22% | -0.38% | -0.07% | |
| CAD | 0.04% | 0.02% | -0.01% | 0.20% | -0.06% | -0.21% | 0.11% | |
| AUD | 0.10% | 0.06% | 0.05% | 0.22% | 0.06% | -0.12% | 0.19% | |
| NZD | -0.24% | 0.21% | 0.18% | 0.38% | 0.21% | 0.12% | 0.32% | |
| CHF | -0.04% | -0.10% | -0.14% | 0.07% | -0.11% | -0.19% | -0.32% |
The percentage changes of major currencies against each other are displayed in the heat map. The base currency is on the left column, and the quote currency is on the top row.
Analysis Breakdown:
The Japanese Yen is facing challenges due to geopolitical tensions in the Middle East, discussions on BoJ interest rate hikes, and shifting expectations regarding Fed rate cuts. This environment can impact currency exchange rates and global financial markets, potentially affecting investment decisions and economic outcomes. Stay informed and monitor these developments for potential implications on your finances and investment strategies.