The Japanese Yen () kicks off the new year on a weaker note in the wake of a devastating earthquake in central Japan on Monday. Apart from this, a modest US Dollar () strength, bolstered by a further rise in the US Treasury bond yields, remains supportive of the bid tone surrounding the USD/JPY pair through the first half of the European session. That said, the divergent expectations about the future policy action by the Bank of Japan (BoJ) and the Federal Reserve keep a lid on any further gains for the major. Market players seem convinced that the Bank of Japan (BoJ) will exit its ultra-loose policy and lift interest into positive territory by the first half of 2024. The current pricing suggests a strong possibility of such an action in April, after the annual wage negotiations in March. In contrast, the Federal Reserve (Fed) is anticipated to start cutting interest rates as early as March 2024. Dovish Fed expectations, meanwhile, should cap the US bond yields and the buck, which, in turn, favors the JPY bulls and caps the USD/JPY pair. Furthermore, geopolitical risks and concerns about fragile economic recovery in China validate the positive outlook for the safe-haven JPY. Traders, meanwhile, seem reluctant to place directional bets ahead of the FOMC minutes on Wednesday and this week’s important US macro releases, including the closely-watched monthly employment details (NFP) report on Friday. Hence, it will be prudent to wait for strong follow-through buying before confirming that the USD/JPY pair has bottomed out and positioning for further gains. Daily Digest Market Movers: Japanese Yen remains depressed against USD, lacks follow-through
Technical Analysis: USD/JPY could attract fresh sellers and remain capped near the 142.00 markFrom a technical perspective, the recent breakdown and acceptance below the 200-day Simple Moving Average (SMA) was seen as a fresh trigger for the USD/JPY bears. Moreover, oscillators on the daily are yet to signal oversold conditions and support prospects for deeper losses. Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out quickly ahead of the 142.00 round figure. That said, some follow-through buying could trigger a short-covering move and lift spot prices beyond the 142.40 intermediate hurdle, towards retesting the 200-day SMA breakpoint, currently near the 143.00 mark.On the flip side, the 141.00 round figure could protect the immediate downside ahead of the multi-month low, around the 140.25 region touched last week, and the 140.00 psychological mark. The latter should act as a key pivotal point, which if broken decisively could make the USD/JPY pair vulnerable to accelerate the fall towards the 139.35 region en route to the 139.00 mark, the 138.75 area and the 138.00 mark (July 28 low). Japanese Yen price todayThe table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).More By This Author:USD/CAD Approaches 1.3300 As US Dollar Strengthens In A Data-Packed Week Gold Price Advances On Persistently High Rate-Cut Bets GBP/USD Price Analysis: Grapples To Recover Recent Losses, Trades Near 1.2730
