- USD/JPY sees plenty of chart churn after BoJ fails to meet market tone expectations.
- Recent hawkish comments from BoJ Governor Ueda pivoted to usual dovishness, slapping down overeager Yen bets.
- 200-hour SMA proving a tricky barrier to overcome.
USD/JPY saw a hard rally early Tuesday after the Bank of Japan (BoJ) cut the knees out from underneath soaring market expectations of an unexpected hawkish pivot sparked by recent comments from BoJ Governor Kazuo Ueda, who noted that the BoJ's current monetary policy framework could see some tightening at some point in the future if the macro data favors it.
Market participants promptly ran far ahead of current market conditions, with investors pivoting about-face last week looking for signs that the BoJ would begin easing towards a tightening cycle.
Governor Ueda's comments proved to be further flung than investors were prepared to admit after that BoJ's latest Monetary Policy Statement and follow-up Press Conference revealed that the specific economic conditions required for a tightening shift from the BoJ are currently not present, and remain a lofty future goal rather than an imminent dynamic adjustment.
The Yen (JPY) tumbled nearly 2% peak-to-trough against the US Dollar after markets rebalanced their Yenb expectations once again.
BoJ’s Ueda: Want to see if next spring's wage growth is strong enough to support consumption
According to Governor Ueda, the BoJ is waiting to see how wage growth develops through 2024's first quarter and heading into the second before making any assessments regarding policy changes.
This fell well short of market expectations which had ramped up into “imminently hawkish BoJ” hopes after Ueda briefly mentioned a possible end to the negative rate regime at some point in the future.
The rest of the trading week turns to face a final raft of US economic data heading into the final week of trading in 2023, with US Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) Price Index figures due on Thursday and Friday, respectively.
US GDP is expected to hold steady at 5.2% for the annualized period ending in the third quarter, while US PCE Index numbers, the Federal Reserve’s favored method of tracking domestic inflation, are expected to slightly tick down from 3.5% to 3.3% for the year ended November.
USD/JPY Technical Outlook
Intraday action finds the USD/JPY pinned into the 200-day Simple Moving Average (SMA) near the 144.00 handle, after hitting a Tuesday high that fell just shy of the 145.00 major price level.
Near-term momentum has leaned bullish for the USD/JPY, but topside momentum remains capped below the last notable swing high into 146.50 last week.
Daily candlesticks show the USD/JPY churning at the 200-day SMA as medium-term momentum drains out of the pair, leaving bids to waffle into long-term median prices.
USD/JPY Hourly Chart
USD/JPY Daily Chart
USD/JPY Technical Levels
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 extends slide below 1.0300, touches new two-year low
EUR/USD stays under bearish pressure and trades at its lowest level since November 2022, below 1.0300 on Thursday. The US Dollar benefits from the risk-averse market atmosphere and the upbeat Jobless Claims data, causing the pair to stretch lower.
GBP/USD slumps to multi-month lows below 1.2400 on broad USD strength
Following an earlier recovery attempt, GBP/USD reversed its direction and declined to its weakest level in nearly eight months below 1.2400. The renewed US Dollar (USD) strength on worsening risk mood weighs on the pair as trading conditions normalize after the New Year break.
Gold benefits from risk aversion, climbs above $2,650
Gold gathers recovery momentum and trades at a two-week-high above $2,650 in the American session on Thursday. The precious metal benefits from the sour market mood and the pullback seen in the US Treasury bond yields.
These 5 altcoins are rallying ahead of $16 billion FTX creditor payout
FTX begins creditor payouts on January 3, in agreement with BitGo and Kraken, per an official announcement. Bonk, Fantom, Jupiter, Raydium and Solana are rallying on Thursday, before FTX repayment begins.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
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.