USD/JPY meets with a fresh supply on Thursday and is pressured by a combination of factors.
Bets that the BoJ will end its ultra-easy monetary policy underpin the JPY and weigh on the pair.
The uncertainty over the Fed’s rate-hike path prompts USD selling and contributes to the decline.
The USD/JPY pair comes under some selling pressure during the Asian session on Thursday and snaps a two-day winning streak to the weekly high, around the 147.75 region touched the previous day. Spot prices drop to the 147.00 mark, or a fresh daily low in the last hour, with bears now awaiting a sustained break and acceptance below the 200-hour Simple Moving Average (SMA) before positioning for any further losses.
The Japanese Yen (JPY) is underpinned by speculations that the Bank of Japan (BoJ) will end its ultra-easy monetary policy, which, in turn, is seen as a key factor weighing on the USD/JPY pair. In fact, the markets are now betting that the central bank may scrap its yield-curve control (YCC) policy and put an end to negative interest rates as early as this year, especially after the BoJ Governor Kazuo Ueda’s hawkish comments over the weekend.
In an interview with Yomiuri newspaper, Ueda signalled that hiking interest rate is among the options available if the BoJ becomes confident that prices and wages will keep going up sustainably. This, in turn, triggered a sell-off in the Japanese government bonds (JGB) and pushed the yield on the benchmark 10-year JGB to its highest level since January 2014 on Tuesday, which continues to act as a tailwind for the JPY.
Apart from this, the emergence of some US Dollar (USD) selling, amid the uncertainty over the Federal Reserve’s (Fed) future rate-hike path, contributes to the offered tone surrounding the USD/JPY pair. The US consumer inflation figures released on Wednesday ensured that the Fed will keep rates steady at its policy meeting next week. The still-sticky inflation, however, keeps hopes for one more lift-off by the end of this year.
The current market pricing indicates a more than 50% chance of a 25 basis points (bps) lift-off either in November or December. This, in turn, might hold back the USD bears from placing aggressive bearish and help limit losses for the USD/JPY pair. Traders now look to the US economic docket – featuring the release of the usual Weekly Initial Jobless Claims, the Producer Price Index (PPI) and monthly Retail Sales – for a fresh impetus.
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.
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : FXStreet – https://www.fxstreet.com/news/usd-jpy-hangs-near-daily-low-bears-flirt-with-200-hour-sma-support-near-14700-mark-202309140418