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JPY: USD/JPY Trades Back Above 153.00, Ueda Hints At Future Hikes

JPY
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  • USDJPY has continued its recent rally on Wednesday, hitting an overnight high of 153.17, before selling off a touch to close the session +1.11% at 152.76. The decline is driven by a stronger dollar and rising US yields, fueled by the Federal Reserve’s cautious stance on rate cuts and expectations of potentially more inflationary US policies after the presidential election.
  • Recent price action further affirms the resumption of the uptrend that started Sep 16, underpinned by rising core yields. Initial resistance is at 153.40, the 61.8% retracement of the downleg posted off the July 3rd high. Above here, the most notable level is 155.22, the Jul 30 high.
  • While the BOJ is not expected to raise rates next week, Governor Kazuo Ueda hinted at future hikes. Investors are concerned that if the yen weakens further, Japanese officials may intervene. Nomura suggests post-election weakness could prompt the BOJ to signal rate hikes as early as December.
  • The past month has seen the JPY fall against all G10 currencies, with the JPY falling the most against the USD, down 6.67%, while it performs the best against the NZD, although still down 1%, this on the back of the expectations of aggressive rate cuts by the RBNZ over the next two meetings.
  • Today, we have Investors flows, Jibun Bank PMI & Machine Tool Orders
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  • USDJPY has continued its recent rally on Wednesday, hitting an overnight high of 153.17, before selling off a touch to close the session +1.11% at 152.76. The decline is driven by a stronger dollar and rising US yields, fueled by the Federal Reserve’s cautious stance on rate cuts and expectations of potentially more inflationary US policies after the presidential election.
  • Recent price action further affirms the resumption of the uptrend that started Sep 16, underpinned by rising core yields. Initial resistance is at 153.40, the 61.8% retracement of the downleg posted off the July 3rd high. Above here, the most notable level is 155.22, the Jul 30 high.
  • While the BOJ is not expected to raise rates next week, Governor Kazuo Ueda hinted at future hikes. Investors are concerned that if the yen weakens further, Japanese officials may intervene. Nomura suggests post-election weakness could prompt the BOJ to signal rate hikes as early as December.
  • The past month has seen the JPY fall against all G10 currencies, with the JPY falling the most against the USD, down 6.67%, while it performs the best against the NZD, although still down 1%, this on the back of the expectations of aggressive rate cuts by the RBNZ over the next two meetings.
  • Today, we have Investors flows, Jibun Bank PMI & Machine Tool Orders