Market Analysis: Japanese Yen Weakens Amid BoJ’s Monetary Policy
- The Japanese Yen (JPY) declines against the US Dollar (USD) on BoJ’s accommodative stance.
- Prime Minister Ishiba’s support for low rates adds pressure on the JPY.
- US Dollar gains amidst Middle East tension and weaker ISM Manufacturing PMI.
BoJ’s Monetary Policy Impact on JPY-USD Pair
The Japanese Yen weakened against the US Dollar due to the Bank of Japan’s (BoJ) Summary of Opinions suggesting no immediate plans for rate hikes. The BoJ aims to maintain its accommodative stance, subject to economic improvements.
Impact of PM Ishiba’s Statements on JPY
Prime Minister Shigeru Ishiba’s remarks supporting low borrowing costs for economic recovery put further strain on the Japanese Yen, favoring the USD/JPY pair.
USD Strength Amid Global Tensions
The US Dollar received support amidst escalating Middle East tensions, although the weaker ISM Manufacturing PMI for September may have influenced a slight downturn. Traders await the US ADP Employment Change and Fedspeak for guidance.
Daily Market Movers: BoJ Rate Cut Odds and Geopolitical Concerns
- The CME FedWatch Tool shows a 63.1% probability of a 25 basis point rate cut by the Federal Reserve in November.
- Iran’s ballistic missile launch at Israel and subsequent threats escalate global geopolitical tensions.
- US ISM Manufacturing PMI for September matched August’s reading but fell below market expectations.
- Japan’s Tankan Large Manufacturing Index remains stable, and the Unemployment Rate improved in August.
- Fed Chair Powell emphasizes gradual rate adjustments, signaling a cautious approach.
- St. Louis Fed President Musalem advocates for gradual rate cuts amid economic uncertainties.
- BoJ minutes highlight inflation risk vigilance and considerations for rate adjustments.
Technical Analysis: USD/JPY Trends and Resistance Levels
USD/JPY trades near 143.80, consolidating within an ascending channel pattern, indicating a bullish trend. The RSI near 50 suggests further upside potential.
Resistance levels: 146.80 (channel boundary), 147.21 (five-week high).
Support levels: 143.50 (nine-day EMA), 143.00 (channel lower boundary), 139.58 (June 2023 low).
USD/JPY: Daily Chart
Japanese Yen Price Today
The Japanese Yen weakened against major currencies today, particularly the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.06% | 0.14% | 0.14% | -0.07% | -0.23% | -0.33% | -0.07% |
| EUR | 0.05% | -0.02% | 0.22% | 0.22% | -0.05% | -0.19% | -0.28% | -0.02% |
| GBP | 0.06% | 0.02% | 0.19% | 0.19% | -0.03% | -0.17% | -0.27% | -0.00% |
| JPY | -0.14% | -0.22% | -0.19% | 0.14% | -0.16% | -0.38% | -0.49% | -0.22% |
Japanese Yen FAQs
What affects the Japanese Yen’s value?
The Japanese Yen is influenced by the Japanese economy’s performance, Bank of Japan’s policies, US-Japan bond yield differentials, and risk sentiment among traders.
How does the BoJ impact the Yen?
The BoJ intervenes in currency markets to control the Yen’s value, favoring a policy divergence from other central banks. Recent policy shifts have affected the Yen’s value.
Why is the Yen considered a safe-haven?
The Japanese Yen is seen as a safe-haven during market turmoil, as investors seek its stability. Turbulent times strengthen the Yen against riskier currencies.