USDJPY Hold Gains Amid Expectation of BoJ Rate Hike Delay

Fundamental Analysis

* Yen Drift: The Japanese Yen (JPY) weakened against the US Dollar amid concerns that the Bank of Japan (BoJ) is in no rush to increase interest rates. After the BoJ’s policy decision on Friday, Governor Kazuo Ueda indicated that rate hikes would be considered if inflation trends align with their forecasts. Ueda highlighted that Japan’s real interest rate remains significantly negative, which is supporting economic growth and driving up prices. He added that the BoJ will raise rates if the economy and inflation evolve as projected in the quarterly outlook report. Additionally, Japan’s Finance Minister Shunichi Suzuki stated on Tuesday that he is closely monitoring the effects of central bank policies globally. Suzuki also emphasized the expectation that the BoJ will take appropriate monetary actions in coordination with the government.

Technical Analysis

* Technical Breakout: USDJPY was traded higher following recent rebound from its lows. MACD which illustrate diminishing bearish momentum signal with the formation of golden cross suggest the pair to likely extend its gains.

*Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 144.60. Conversely, a potential reversal is also to be expected and the price could head back towards 141.90.

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Potential Risks

Looking ahead, investors will turn their attention to upcoming U.S. data, including Durable Goods Orders, GDP, and the PCE Price Index, for additional insights into market trends.

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Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.