- USD/JPY stages an intraday bounce from a multi-day low touched earlier this Friday.
- The USD trims a part of heavy intraday losses and offers some support to the major.
- The risk-on impulse undermines the safe-haven JPY and contributes to the recovery.
The USD/JPY pair rebounds swiftly from a three-day low touched earlier this Friday, though struggles to capitalize on the attempted recovery move. The pair is currently trading around the 142.30-142.25 area, still down nearly 1.25% for the day.
The US dollar trims a part of its heavy intraday losses to a fresh monthly low and continues to draw support from rising bets for a more aggressive policy tightening by the Fed. Apart from this, the risk-on impulse - as depicted by a generally positive tone around the equity markets - undermines the safe-haven Japanese yen and assists the USD/JPY pair to attract some buying near the mid-141.00s.
The markets, however, already seem to have priced in a supersized 75 bps rate hike at the September FOMC meeting. Furthermore, speculations that authorities may soon step in to arrest the freefall in the JPY hold back traders from placing aggressive bets around the USD/JPY pair. This, in turn, might keep a lid on any meaningful upside for spot prices, at least for the time being.
That said, a big divergence in the monetary policy stance adopted by the Bank of Japan and the US central bank warrants some caution before confirming that the USD/JPY pair has topped out. Hence, Friday's sharp downfall might still be categorized as a corrective pullback amid extremely overbought conditions, especially after a strong rally of nearly 30% since the beginning of the year.
There isn't any major market-moving economic data due for release from the US on Friday. Hence, the focus will remain on scheduled speeches by Fed officials, which will play a key role in influencing the USD price dynamics. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the USD/JPY pair.
Technical levels to watch
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: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
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.