- USD/JPY trades in positive territory for the fifth consecutive day on Friday.
- Federal Reserve (Fed) Chair Powell said they are not confident that they have achieved a sufficiently restrictive policy.
- Bank of Japan (BoJ) Governor Ueda said they will exit the ultra-loose monetary policy with caution to avoid major volatility.
- Market players await the US University of Michigan Consumer Sentiment Survey on Friday.
The USD/JPY pair holds above the 151.00 mark during the early Asian session on Friday. The higher US dollar and US Treasury bond yields lend some support to the pair. However, the further gains might trigger some intervention from the Japanese authorities. The pair currently trades near 151.35, losing 0.01% on the day.
Later this week, Fed Governor Raphael Bostic said there’s probably no need for more rate hikes. But the Federal Reserve (Fed) Chair Jerome Powell offered hawkish comments on Thursday, which lift the US Dollar against its rivals. Fed Chair Powell said that they are not confident that they have achieved a sufficiently restrictive policy to bring inflation down to 2% over time while opening the door for additional rate hikes if it’s appropriate.
On Thursday, the US weekly Initial Jobless Claims for the week ending November 4 totaled 217K against the market expectation of 218K. The Continuing Claims rose to 1.834M from 1.812M in the previous reading, the highest level since mid-April.
Investors will focus on US Consumer sentiment and the inflation expectation data due later on Friday. The preliminary University of Michigan consumer sentiment data for November is expected to grow by 63.7.
On the Japanese Yen front, the Bank of Japan (BoJ) maintains its dovish stance despite the aggressive tightening policy from the major central banks. On Thursday, BoJ Governor Kazuo Ueda said the central bank will exit the ultra-loose monetary policy with caution to avoid triggering significant volatility in the bond market.
Ueda added that Japan was making moves towards the central bank's 2% inflation target, with a cycle of increasing wages and domestic demand-driven inflation gradually gathering speed.
Looking ahead, market participants will monitor the Fed's Logan speech for fresh impetus. Any hawkish comment could lift the US Dollar (USD) higher and act as a tailwind for the pair. Apart from this, the preliminary Michigan Consumer Sentiment Index for November and the UoM 5-year Consumer Inflation Expectation will be released. Traders will take cues from the data and find a trading opportunity around the USD/JPY pair.
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