- USD/JPY attracts some follow-through buyers for the second straight day on Tuesday.
- Fed Chair Powell’s hawkish remarks on Monday underpin the USD and lend support.
- The uncertainty over the BoJ’s rate-hike path contributes to the modest intraday uptick.
The USD/JPY pair is seen building on the overnight goodish bounce from the 141.65 area, or a nearly two-week low and gaining traction for the second straight day on Tuesday. The move-up lifts spot prices beyond the 144.00 mark during the Asian session and is sponsored by a combination of factors.
The US Dollar (USD) draws support from the Federal Reserve (Fed) Chair Jerome Powell's relatively hawkish tone on Monday, which forced investors to scale back their bets for another oversized rate cut in November. The Japanese Yen (JPY), on the other hand, remains on the defensive in the wake of comments from Japan's incoming Prime Minister (PM) Shigeru Ishiba, saying that the Bank of Japan's (BoJ) monetary policy must remain accommodative to underpin a fragile economic recovery.
Furthermore, Ishiba said on Monday that he intends to call a general election on October 27. Apart from this, the underlying bullish sentiment across the global financial markets is seen undermining demand for the safe-haven JPY and acting as a tailwind for the USD/JPY pair. The JPY bulls remained on the sidelines after BoJ's Summary of Opinions from its September meeting revealed that the central bank will adjust its accommodative stance if economic conditions improve.
On the economic data front, Japan's Unemployment rate fell more than expected, to 2.5% in August from 2.7% in the previous month. Adding to this, a closely watched BoJ's Tankan survey showed that sentiment among Japan's big manufacturers was steady in the three months to September and a slight improvement in large non-manufacturers' mood. This, however, does little to provide any impetus to the JPY or the USD/JPY pair, supporting prospects for further intraday gains.
Market participants now look to the US economic docket – featuring the release of the ISM Manufacturing PMI and JOLTS Job Openings data. This, along with speeches by influential FOMC members, will drive the USD demand and produce short-term trading opportunities around the USD/JPY pair. Apart from this, important US macro releases scheduled at the start of a new month, including the Nonfarm Payrolls (NFP) report, should determine the next leg of a directional move.
Economic Indicator
BoJ Summary of Opinions
This report includes the BOJ's projection for inflation and economic growth. It is scheduled 8 times per year, about 10 days after the Monetary Policy Statement is released.
Read more.Last release: Mon Sep 30, 2024 23:50
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
Source: Bank of Japan
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD consolidates strong Aussie Retail Sales-led gains above 0.6900
AUD/USD holds gains above 0.6900 in Asian trading on Tuesday. Stronger-than-expected Australian Retail Sales data continue to underpin the pair amid a broad US Dollar resurgence, as risk sentiment sours. US data and Fedspeak eyed.
USD/JPY regains 144.00 on renewed US Dollar demand
USD/JPY is back above 144.00 in the Asian session on Tuesday, reversing a brief led by the mixed Japanese data and BoJ's hawkish rhetoric on further interest rate hikes. The pair tracks the renewed US Dollar uptick, as traders turn cautious ahead of key US data, Fedspeak.
Gold price trades with mild positive bias above $2,625-2,624 pivotal support
Gold price ticks higher on Tuesday and stalls its recent corrective slide from the all-time top. Bets for further rate cuts by the Fed and geopolitical risks continue to benefit the XAU/USD. Traders now look forward to the release of key US macro data for some meaningful impetus.
Bitcoin and crypto market maintain decline despite Fed Chair Powell's hints at further rate cuts
The general crypto market continued on a downtrend on Monday despite Fed Chair Jerome Powell hinting at the possibility of further interest rate cuts later in the year.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.