FOREX
- Despite a moderate stabilisation for major equity indices, the substantial losses and lower core yields on the session are limiting the ability for USDJPY to bounce, with the pair only managing a 154.23 high from the 153.72 lows at the early NY crossover.
- As noted, the USDJPY selloff picked up momentum following the clean trendline break, drawn from the September lows, bolstered by the breach of a cluster of lows just below the 155 handle.
- Barring a meaningful reversal, the pair looks set to close below its 50-day EMA, which intersects today at 155.15. This would represent the first close below this average since December 09, and is a meaningful bearish development technically. This paves the way for an extension towards 152.55, a Fibonacci retracement point, and 151.81, the Dec 12 low.
- Although last Friday’s BOJ meeting was met with limited lasting market reaction, analysts have noted the BoJ delivered a more hawkish message than expected, upgrading its inflation forecasts for FY2025 and emphasising confidence in the outlook that should allow for additional rate hikes. This could keep USDJPY on the backfoot ahead of this week’s FOMC meeting and press conference.
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