The Japanese Yen Faces Challenges Despite Friday’s Recovery
- BoJ Governor Ueda’s Comments Impact the JPY
- Intervention Concerns and USD Price Action Influence USD/JPY Pair
The Japanese Yen (JPY) struggles to maintain momentum after Friday’s positive movement, facing downward pressure on Monday due to Bank of Japan (BoJ) Governor Kazuo Ueda’s silence on a December rate hike. The JPY’s safe-haven status is weakened by a positive market sentiment, leading the USD/JPY pair to climb over 100 pips from its Asian session low around 153.85.
Despite this, worries of Japanese intervention in the foreign exchange market to support the JPY and a lackluster performance of the US Dollar (USD) may limit gains for the USD/JPY pair. Traders are cautious ahead of BoJ Governor Ueda’s upcoming media conference at 04:45 GMT, awaiting further guidance for intraday trading.
Key Factors Affecting the Japanese Yen
- BoJ Governor Ueda’s Comments on Rate Hike Expectations
- Finance Minister Katsunobu Kato’s Warning on FX Market Scrutiny
- Geopolitical Tensions Escalating with US Support for Ukraine
- US Dollar Performance Post-Election and Inflation Expectations
The Impact on Global Markets
Investors interpret US President-elect Donald Trump’s policies as inflationary, potentially hindering further rate cuts by the Federal Reserve. Recent statements from influential Federal Open Market Committee (FOMC) members, including Fed Chair Jerome Powell, suggest a cautious approach to rate adjustments given positive economic indicators.
Furthermore, data from the US Census Bureau indicates a modest increase in Retail Sales, aligning with market expectations. Traders are currently pricing in a 60% chance of a 25-basis-point rate cut by the Fed at the December meeting, pending further economic developments.
Technical Analysis of USD/JPY Pair
Chart analysis reveals the USD/JPY pair’s resilience near the 154.00 level, with indicators favoring bullish sentiment. A sustained break above the psychological barrier at 155.00 could signal further upside towards 156.00. Conversely, a dip below 153.85 may lead to support tests near 153.00 and 152.70.
Upcoming Economic Indicator: BoJ Governor Ueda’s Speech
Kazuo Ueda’s upcoming speech holds significance for market participants, offering insights into Japan’s monetary policy direction. As the first academic economist to lead the Bank of Japan, Ueda’s statements carry weight in shaping investor sentiment.
Stay tuned for BoJ Governor Ueda’s press conference at 04:45 GMT on Monday for potential market-moving cues.