- USD/JPY falls to near 150.00 amid a sell-off in the USD Index.
- Fed policymakers warned that over-focusing on a one-time inflation increase could be a tremendous mistake.
- The BoJ may postpone plans of exiting the expansionary monetary policy stance.
The USD/JPY pair falls slightly below the psychological support of 150.00 in the early New York session on Tuesday. The asset has faced selling pressure as the US Dollar Index (DXY) has extended its downside to 104.00.
The USD Index has dropped to a weekly low as Federal Reserve (Fed) policymakers are confident that inflation is in the right direction despite a one-time stubborn-than-anticipated consumer price inflation data for January.
Fed policymakers advised that over-focusing on one-time blips in inflation data could be a tremendous mistake. As per the CME FedWatch tool, investors see interest rates remaining unchanged in the range of 5.25%-5.50% till the July policy meeting as the Fed needs more good inflation data for months.
The Japanese Yen performs better against the US Dollar despite easing hopes for the Bank of Japan (BoJ) quitting the decade-long ultra-dovish monetary policy stance. The Japanese Yen entered a recession in the second half of 2023. The situation of a poor domestic economy is an unfavorable situation for exiting the expansionary policy stance.
USD/JPY oscillates in a Symmetrical Triangle formation on an hourly time frame. The upward and downward-sloping borders of the aforementioned chart pattern are plotted from February 13 low and high at 149.27 and 150.88, respectively.
The triangle could breakout in either direction, however, the odds marginally favor a move in the direction of the trend before the formation of the triangle – in this case up.
The 50-period Exponential Moving Average (EMA) around 150.20 remains sticky to spot prices, indicates indecisiveness among market participants.
Going forward, a decisive break above February 13 high at 150.88 would drive the asset towards November 16 high at 151.43, followed by November 13 high at 151.90.
On the flip side, a breakdown below February 13 high at 149.27 would drag the asset towards February 5 high at 148.90. Breach of the latter would expose the asset to January 29 high at 148.32.
USD/JPY hourly chart
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.