The Japanese yen has surged on Thursday after showing little movement this week. In the European session, USD/JPY is trading at 152.68, at the time of writing, down 0.48% on the day. Earlier, USD/JPY rose as high as 0.9% before retracting.
Bank of Japan stays on the sidelines
The Bank of Japan didn’t have any surprises up its sleeve and held interest rates at 0.25% at today’s policy meeting. The BoJ released updated growth and inflation forecasts, but these didn’t provide any clues about rate moves as the forecasts had only minor revisions.
Governor Ueda said at a press conference that “inflation was moving in line with our forecasts” towards the 2% target, but added that he had no “preset idea” as to the timing of a rate hike. Ueda said that the central bank would make its rate decisions based on the data, which means that investors shouldn’t expect any broad signals from the BoJ about its rate path.
Ueda made reference to the currency markets and that has sent the yen flying higher. Ueda stated that the currency markets have had a strong impact on Japan’s economy. The markets took this as a possible indication that a rate hike will be sooner rather than later, although the BoJ is likely to wait until early 2025 before raising interest rates.
The BoJ has intervened in the currency markets when the yen depreciated quickly and another intervention could be in the works, as the yen has had a miserable October, falling 6.3%.
The political uncertainty is not helping the wobbly yen. Japan’s general election left the ruling Liberal Democratic Party without a majority and it’s unclear if Prime Minister Ishiba will be able to cobble together a government.
USD/JPY technical
-
USD/JPY tested support at 153.02 earlier. The next support level is 152.47.
-
153.64 and 154.19 are the next resistance lines.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD keeps its daily gains below 1.0900 post-US PCE
The bearish sentiment in the US Dollar remains unabated and supports EUR/USD's constructive outlook, keeping it in the upper-1.10800s after the release of U.S. inflation data, as measured by the PCE, on Thursday.
USD/JPY trims losses and approaches 153.00
Following an earlier decline below 152.00, USD/JPY now manages to regain some composure and advance to the vicinity of the 153.00 barrier. The initial strong bullish move in the Japanese Yen came after BoJ's Ueda left the door open to a potential rate hike in December at the bank's meeting early onThursday.
Gold corrects lower to $2,770 following US inflation prints
Gold remains on the back foot near $2,770 per troy ounce, as US inflation data ticked lower in September, while US yields display a negative performance across the curve.
Eurozone inflation up to 2% in October as unemployment hits new record low
The Eurozone’s inflation rate increased more than expected, with core inflation stable at 2.7%. The direction of incoming data in the region is not quite clear, which provides the ECB with confusing signals for the path of rate cuts.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.