USD/JPY Forecast and News
USD/JPY rises to near 154.00 amid improved US Dollar
USD/JPY gained ground due to an upward correction in the Greenback. The US Dollar could face challenges due to rekindled hopes for rate cuts by the Fed in 2024. The safe-haven Japanese Yen depreciates amid the prevailing risk appetite.
Latest Japanese Yen News
USD/JPY Technical Overview
USD/JPY extends gains for the second successive session, trading around 154.00 during the European hours. The upward correction in the US Dollar (USD) provides support for the US Dollar, consequently, underpinning the USD/JPY pair. However, the Greenback could face resistance due to investors’ optimism following the softer US labor data on Friday. This development has reignited hopes for potential interest rate cuts by the Federal Reserve (Fed) in 2024.
Fundamental Overview
According to Bloomberg, Richmond Federal Reserve (Fed) President Thomas Barkin said on Monday that elevated interest rates would likely restrain economic growth in the United States (US). Meanwhile, higher interest rates help to mitigate inflationary pressures, aligning them more closely with the central bank's 2% target.
Barkin also emphasized that the strong labor market offers the Federal Reserve an opportunity to confirm a sustained decline in inflation before considering adjustments to borrowing costs. However, he cautioned about the persistent inflationary pressures in the housing and services sectors, which pose a risk of sustaining elevated price levels.
The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, trades higher around 105.20. The weaker US Treasury yields contribute to limiting the advance of the US Dollar. 2-year and 10-year yields on US Treasury bonds stand at 4.80% and 4.45%, respectively, by the press time.
In Japan, Masato Kanda, Japan's top currency diplomat, hinted at potential measures to address excessive market fluctuations earlier on Tuesday. Last week, the Japanese Yen (JPY) experienced appreciation amid speculation of government intervention by Japanese authorities. Reuters reported data from the Bank of Japan (BoJ) indicating that Japanese authorities may have allocated around ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to support the JPY.
Masakazu Tokura, Chairman of KEIDANREN (Japan Business Federation), expressed that FX rates should reflect fundamentals in the medium to long term. Tokura stated uncertainty regarding whether authorities intervened but noted that if they did, the timing was opportune, as reported by forexlive.com.
USD/JPY Big Picture
USD/JPY Bullish Themes
USD/JPY Bearish Themes
Latest JPY Analysis
Editors' picks
EUR/USD stays in tight channel above 1.0750
EUR/USD continues to fluctuate in a narrow band slightly above 1.0750 after posting small gains on Monday. Disappointing Factory Orders data from Germany limits the Euro's gains as investors keep a close eye on comments from central bankers.
GBP/USD retreats below 1.2550 as USD recovers
GBP/USD stays under modest bearish pressure and trades below 1.2550 in the European session on Tuesday. The cautious market stance helps the USD hold its ground and doesn't allow the pair to regain its traction. The Bank of England will announce policy decisions on Thursday.
USD/JPY rises to near 154.00 amid improved US Dollar
USD/JPY gained ground due to an upward correction in the Greenback. The US Dollar could face challenges due to rekindled hopes for rate cuts by the Fed in 2024. The safe-haven Japanese Yen depreciates amid the prevailing risk appetite.
Gold declines below $2,320 amid renewed US Dollar demand
Gold trades in negative territory below $2,320 as the souring mood allows the USD to find demand on Tuesday. Nevertheless, the benchmark 10-year US Treasury bond yield stays below 4.5% and helps XAU/USD limit its losses.
WTI trades around $78.50 with a positive sentiment after Israel's strike on Rafah city
West Texas Intermediate crude Oil price hovers around $78.50 per barrel during the Asian trading hours on Tuesday. The Oil prices experienced a slight increase following Israel's strike on Rafah in Gaza.
Majors
Cryptocurrencies
Signatures
USD/JPY YEARLY FORECAST
How could USD/JPY move this year? Our experts make a USD/JPY update forecasting the possible moves of the yen-dollar pair during the whole year.
USD/JPY FORECAST 2024
The Japanese Yen could receive support from the BoJ if it indicates a shift toward ending its ultra-loose monetary policy stance, potentially through a rate hike that would mark the end of seven years of negative rates. Governor Ueda and Deputy Governor Hino offered some comments about it in December. Rumors and speculations in that direction would trigger momentum for the Yen. Read more details about the forecast.
The divergence in monetary policy between the Federal Reserve and the Bank of Japan led the pair to test the multi-decade high near 152.00.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR USD/JPY
There is a possibility that the BoJ might end its negative interest rate policy (NIRP) by raising the key rate to 0.00% in 2024. Some analysts anticipate the eventual end of YCC by January, while others believe it is more likely to occur during the second quarter. A significant challenge for the BoJ is to exit from NIRP without disrupting the economy.
Governor Kazuo Ueda has emphasized that any move will be carefully calculated, and the central bank will likely prepare the market for a change. This scenario is more likely to materialize if inflation in Japan remains above 3%.
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
The Bank of Japan (BOJ)
The Bank of Japan is the central bank of Japan and it's a juridical person established based on the Bank of Japan Act, nor being a government agency either a private corporation. The most important missions of the BOJ are the following: to issue and manage banknotes, to implement monetary policy and to ensure stability of the financial system. Almost all of the decisions are taken by the Policy Board, formed by a bunch of members working to provide currency and monetary control and setting the next moves that the central bank will take.
BOJ Official Website and on Twitter
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Kazuo Ueda
Kazuo Ueda is the 32nd and current Governor of the Bank of Japan. He is a professor and the dean of the business department at Kyoritsu Women's University in Tokyo and the external director at JGC Holdings Corp, an engineering company and at the state-owned Development Bank of Japan. The 71-year-old is widely seen as an expert on monetary policy but is seen as a surprise appointment by analysts. He was not even considered a dark-horse candidate. Ueda wasn’t really on their radar because the BOJ governor job has traditionally been assumed by a long-serving Finance Ministry bureaucrat or central bank official.
Ueda on Wikipedia's Profile
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
About USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD. Japanese Yen has a low-interest rate and is normally used in carrying trades. This is the reason why is one of the most traded currencies worldwide. In this pair, the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from the United States of America) and Japanese economies.
Trading this currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when referred to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is due to the fact that both currency pairs also use the US Dollar as the base currency. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', referring to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from the United States of America). The Cable is a closely watched and widely traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. For that reason, all the macroeconomic data related to the United States and the United Kingdom affects the price of this pair. One of the events which affected most the volatility of the pound vs. dollar was Brexit.
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity of Euro Dollar is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, the EUR/USD is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online.