From TradingView · · 1m 10s
USD/JPY tests its five-year line
USD/JPY is sitting near a major support zone as Fed and BoJ decisions put yen policy back in focus.
In brief
USD/JPY is sitting near a major support zone as Fed and BoJ decisions put yen policy back in focus. The pair’s next move may depend less on rate hikes themselves and more on what Kazuo Ueda signals about yen weakness, inflation and bonds. Originally reported by TradingView.
Support sits near 153
USD/JPY’s current support is around 153, right where a long-term trendline from 2021 lows now meets the market.
“USD/JPY current support plots around 153”
Central banks line up
Both the Fed and the Bank of Japan are expected to hike this week. The bigger issue is what they say after the decisions.
“both the Fed and BoJ expected to hike later this week”
Bessent raised the stakes
Scott Bessent’s recent comment suggested the BoJ or Japanese policymakers may have more to say about the yen.
“he seemed to imply that the BoJ and/or Japanese policymakers might have more on the matter”
Inflation is still short
Japan’s inflation remains below the 2 percent target, but oil prices and a weak yen are making future inflation harder to ignore.
“inflation in Japan remains below their 2% target”
Bond pressure is building
As Japanese 10-year yields move above 3 percent, yen weakness gives bond holders less reason to stay comfortable in that debt.
“Japanese 10-year debt which is getting more and more comfortable above the 3% level”
Ueda holds the key
For JPY, USD and the wider FX market, the key moment is what Kazuo Ueda says at the BoJ rate decision.
“what else might Kazuo Ueda have to say at the BoJ rate decision”
The one thing
The pair’s next move may depend less on rate hikes themselves and more on what Kazuo Ueda signals about yen weakness, inflation and bonds.
