USD/JPY remains below mid-141.00s amid modest USD weakness, FOMC minutes in focus


  • USD/JPY attracts some buying on Wednesday, though the uptick lacks bullish conviction.
  • Bets for less aggressive rate hikes continue to weigh on the USD and cap gains for the pair.
  • The downside seems limited amid the Fed-BoJ policy divergence, ahead of FOMC minutes.

The USD/JPY pair reverses an intraday dip to sub-141.00 levels and bounces over 50 pips from the daily low. Spot prices, however, struggle to capitalize on the move and meet with a fresh supply near the 141.50 level amid the prevalent selling bias surrounding the US Dollar.

Despite the recent hawkish comments by several Fed officials, investors now seem convinced that the US central bank will slow the pace of its policy tightening. In fact, the current market pricing indicates a greater chance of a relatively smaller 50 bps rate hike at the next FOMC policy meeting in December. This, in turn, has been a key factor behind the recent sharp pullback in the US Treasury bond yields and continues to act as a headwind for the greenback.

The Fed, however, is still far from pausing its rate-hiking cycle and is expected to continue raising borrowing costs to curb inflation. This should limit the downside for the US bond yields and lend some support to the buck. Hence, the market focus will remain glued to the release of the November FOMC meeting minutes, due later during the US session. Investors will look for clues about future rate hikes, which will influence the near-term USD price dynamics.

In the meantime, a more dovish stance adopted by the Bank of Japan (BoJ), along with signs of stability in the equity markets, could undermine the safe-haven Japanese Yen and offer support to the USD/JPY pair. In fact, BoJ, so far, has shown no inclination to hike interest rates. Moreover, BoJ Governor Haruhiko Kuroda reiterates last week that the central bank will stick to its monetary easing to support the economy and achieve the 2% inflation target in a stable fashion.

This marks a big divergence in comparison to the Fed and supports prospects for the emergence of some buying around the USD/JPY pair at lower levels. Even from a technical perspective, Monday's sustained move back above the 100-day SMA resistance, around the 141.00 mark, confirmed a breakout through a one-week-old trading range. This adds credence to the positive outlook and warrants some caution before positioning for any meaningful depreciating move, at least for now.

Technical levels to watch

USD/JPY

Overview
Today last price 141.31
Today Daily Change 0.10
Today Daily Change % 0.07
Today daily open 141.21
 
Trends
Daily SMA20 144.03
Daily SMA50 145.01
Daily SMA100 141.08
Daily SMA200 133.6
 
Levels
Previous Daily High 142.24
Previous Daily Low 141.08
Previous Weekly High 140.8
Previous Weekly Low 137.67
Previous Monthly High 151.94
Previous Monthly Low 143.53
Daily Fibonacci 38.2% 141.53
Daily Fibonacci 61.8% 141.8
Daily Pivot Point S1 140.78
Daily Pivot Point S2 140.35
Daily Pivot Point S3 139.62
Daily Pivot Point R1 141.94
Daily Pivot Point R2 142.67
Daily Pivot Point R3 143.1

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

AUD/USD looks at the RBA for near-term direction

AUD/USD looks at the RBA for near-term direction

AUD/USD resumed its rebound and briefly surpassed the 0.6600 barrier on the back of the renewed and marked resurgence of the downward bias in the US Dollar. Investors, in the meantime, expect the RBA to keep its rates unchanged on Tuesday.

AUD/USD News
EUR/USD: Price action hinges on the US election and the Fed

EUR/USD: Price action hinges on the US election and the Fed

EUR/USD managed to trespass the key 1.0900 hurdle and print new highs following the Greenback’s offered stance as investors warmed up for the US election and the FOMC event later in the week.

EUR/USD News
Gold trades around $2,730

Gold trades around $2,730

Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions. 

Gold News
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum (ETH) is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. 

Read more
US presidential election outcome: What could it mean for the US Dollar?

US presidential election outcome: What could it mean for the US Dollar? Premium

The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.

Read more
Best Forex Brokers with Low Spreads

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.

Read More

Forex MAJORS

Cryptocurrencies

Signatures