The Japanese Yen (JPY) has faced a decline against the US Dollar (USD) following the release of a record trade deficit report. The USD/JPY pair has shown an increase as the JPY struggles after the recent data. Traders are now looking forward to Bank of Japan (BoJ) Governor Kazuo Ueda’s upcoming appearance in parliament to discuss the central bank’s decision to raise interest rates.
A recent Reuters poll revealed that 31 out of 54 economists anticipate a rate hike by the Bank of Japan before the year ends. The median forecast suggests a 25 basis point increase, raising the year-end rate to 0.50%.
On the other hand, the US Dollar (USD) has seen a slight rise, supported by a recovery in Treasury yields. However, with the Federal Reserve considering a 100 basis point rate cut by 2024, the USD’s upward movement may be limited. Market analysts are divided on whether the Fed will opt for a 25 or 50 bps cut at its September meeting.
According to the CME FedWatch Tool, there is a 65.5% chance of a 25 bps rate cut in September, down from 71.0% previously. The probability of a 50 bps cut has increased to 34.5%.
Daily Digest Market Movers: Japanese Yen in Focus Ahead of BoJ Governor Ueda’s Speech
- Traders are cautious ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Annual Symposium, where he may address potential interest rate cuts in the US.
- FOMC Minutes from July indicated that most Fed officials are in agreement about a rate cut in September if inflation continues to cool.
- Japan’s Merchandise Trade Balance turned into a deficit in July, missing market estimates. Imports surged by 16.6% year-on-year, while exports increased by 10.3%.
- Fed Governor Michelle Bowman expressed caution about policy changes, citing inflation risks.
- The Bank of Japan projects a strong economic recovery to support further rate hikes.
- Fed officials emphasize a gradual approach to reducing borrowing costs.
- Economist Kazutaka Maeda sees positive reports supporting the BoJ’s view for further rate hikes.
Technical Analysis: USD/JPY Holding Above 145.00
USD/JPY is trading around 145.20, consolidating below a downtrend line with a bearish bias. The RSI suggests a potential correction, with support levels at 144.00 and 141.69. Resistance levels are at 146.45 and 154.50.
USD/JPY: Daily Chart
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against major currencies today. JPY was weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.05% | 0.01% | -0.05% | 0.19% | 0.13% | -0.01% | |
| EUR | -0.06% | -0.01% | -0.06% | -0.13% | 0.13% | 0.04% | -0.07% | |
| GBP | -0.05% | 0.01% | -0.08% | -0.11% | 0.14% | 0.05% | -0.07% | |
| JPY | -0.01% | 0.06% | 0.08% | -0.15% | 0.17% | 0.09% | -0.04% | |
| CAD | 0.05% | 0.13% | 0.11% | 0.15% | 0.25% | 0.17% | 0.03% | |
| AUD | -0.19% | -0.13% | -0.14% | -0.17% | -0.25% | -0.07% | -0.21% | |
| NZD | -0.13% | -0.04% | -0.05% | -0.09% | -0.17% | 0.07% | -0.13% | |
| CHF | 0.01% | 0.07% | 0.07% | 0.04% | -0.03% | 0.21% | 0.13% |
The heat map displays the percentage changes of major currencies against each other, with the Japanese Yen showing weakness against the Canadian Dollar.