USD/JPY fell at the end of the North American session yesterday, falling below 144.00 for the first time since last Wednesday, Japanese Yen Surges 2% on Interest Rate Hints
Softer than expected, the US JOLTS data in July strengthened the expectation that the Federal Reserve will cut interest rates at its next meeting, leaving only doubts about the size of cut. As a result, this was weighed against the 10-year US Treasury yield in USD / JPY, with a previous loss of about 2% to 3.757%.
Job openings, a measure of labor demand, had fallen by 237,000 to 7.673 million on the last day of July, the lowest level since January 2021, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Data for June was revised lower to show 7.910 million unfilled positions instead of the previously reported 8.184 million.
Adding to this, the currency pair falls sharply since Tuesday after Bank of Japan (BoJ) Governor Kazuo Ueda’s hawkish commentary on interest rates.
Kazuo Ueda reiterated in a document submitted to a government panel on Tuesday that the central bank won’t hesitate to raise interest rates further if the economy and inflation perform as expected, Reuters reported. Inflationary pressures in the Japanese economy continue to remain stubborn. Tokyo Consumer Price Index (CPI), excluding Fresh Food, released on Thursday, rose at a faster pace to 2.4% in August from estimates and July’s release of 2.2%.
Furthermore, The US Dollar has rebounded in start of the week as investors turn cautious ahead of the United States (US) Nonfarm Payrolls (NFP) data for August, which will be published on Friday. Market participants will keenly focus on the official labor market data as the Federal Reserve (Fed) is now more focused on preventing labor demand, given that officials are confident about price pressures returning sustainably to the bank’s target of 2%.
Technical Outlook : U.S. Dollar / Japanese Yen
USDJPY recovered about 2% from a high of 147.12, yesterday’s low of 143.70. The pair continued to trade under pressure from mid-July.
According to the chart above, the pair failed to break above the previous key resistance and returned to yesterday’s low. Even the formation of a long bearish candle indicates a downward movement in the near future.
On the downside, a break below 143.44 should extend the fall to 142.55-141.68.
Otherwise, a short-term rise to 145.67-145.80 should pressure the pair.
Happy trading!
Commodity Samachar Securities
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