- BoJ Deputy Shinichi Uchida cooled hopes for an upcoming tightening cycle in Japan.
- The Nikkei 225 posted its highest close since February 1990, adding roughly 750 points.
- USD/JPY on its way to test the 150.00 level, according to the daily chart.
The US Dollar struggles for direction on Thursday, but not against its Japanese rival. The USD/JPY pair trades in the 149.30 region, its highest since last November. Dovish comments from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, stating policy tightening would be gradual and that a rate adjustment would not necessarily trigger a tightening cycle, weighed on the Japanese Yen.
Such comments underpinned local equities. The Nikkei 225 added roughly 750 points or 2% on the day, outperforming its Asian counterparts. The index closed the day at 36,863.28, the highest close since February 1990.
Meanwhile, higher United States (US) government bond yields gave USD/JPY an additional boost. Solid US employment figures pushed the 10-year Treasury yield to a fresh weekly high of 4.16%, as Initial Jobless Claims further blurred the odds for a Federal Reserve’s (Fed) rate cut.
USD/JPY Technical Outlook
The USD/JPY pair trades a handful of pips below its intraday high, paring its run amid the poor performance of Wall Street, reflecting a souring mood. Still, the pair retains substantial gains and has room to test the 150.00 mark in the upcoming sessions.
In the daily chart, the pair bottomed around a directionless 100 Simple Moving Average (SMA) for the week, providing dynamic support at around 147.50. The initial bounce turned into a firmer rally, and the 20 SMA is currently crossing the mentioned 100 SMA, reinforcing the support area. As long as above it, bulls will likely retain control.
Finally, the Momentum indicator recovered from around its 100 level, while the Relative Strength Index (RSI) indicator accelerated north and approaches overbought readings, both reflecting strong buying interest.
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
EUR/USD eases toward 1.0700 as USD finds feet ahead of ADP, Fed Minutes
EUR/USD is retreating toward 1.0700 in the early European session on Wednesday. The pair struggles, as the US Dollar finds its feet in the aftermath of the dovish Fed Chair Powell's comments. Cooling EU inflation keeps the Euro undermined. Eyes turn to US ADP data, Fed Minutes.
GBP/USD flatlines below 1.2700, looks to US data/Fed minutes
GBP/USD is lacking a firm directional bias below 1.2700 on Wednesday, reversing early gains. Traders appear reluctant and prefer to wait on the sidelines ahead of the FOMC minutes while the UK elections on Thursday also keep them on the edge. US ADP data eyed as well.
Gold eyes a range breakout, as Fed Minutes looms
Gold price is trading around a flatline near $2,330 early Wednesday, as traders consider the recent US jobs data and Federal Reserve Chairman Jerome Powell’s speech, bracing for yet another busy US calendar.
Bitcoin struggles around $64,000 level
Bitcoin faces resistance near the $64,000 daily level, leading to a 1.05% decline in trading on Wednesday. Ethereum and Ripple similarly encounter resistance, resulting in 1% and 0.5% declines, respectively.
ADP Employment Change Preview: US private sector expected to add 160K new jobs in June
The United States ADP Research Institute will release its monthly report on private sector job creation for June. The announcement is expected to show that the country’s private sector added 160K new positions in June after adding 152K in May.