The Japanese yen is still losing the land against the accelerated US dollar on a large scale
- The Japanese yen attracts sellers for the third consecutive day amid a positive risk tone.
- A modest USD bounces from the lowest multi -level level that gives support to the pair of the dollar/JPY.
- BOJ’s different expectations may destroy the couple before the dangers of events in the central bank.
The Japanese yen (JPY) maintains its negative bias amid a modest recovery of the US dollar (USD) from the lowest multi -month -old and raises the pair of the dollar/JPY beyond the mid -149.00, or nearly two weeks during the Asian session on Tuesday. Moreover, the optimistic market mood, which is reinforced by the latest stimulus measures in China and its hopes of the peace agreement in Ukraine, supports the safe JPY and continues to push the pair of the dollar/JPY up to the third day in a row.
However, any decrease in the decrease in the meaning of the JPY is still out of reach in the wake of expectations that the Bank of Japan (BOJ) will continue to raise interest rates in 2025. The bets have been confirmed through positive results of the spring wage negotiations. This is a great difference compared to acceptance of the increasing market in which the Federal Reserve (Fed) will reduce interest rates several times this year, which may achieve gains for the US dollar and the USD/JPY husband.
Traders may also refrain from placing aggressive bets and choose to move to side lines before the risks of the main central bank event for this week. BOJ is scheduled to announce the policy decision on Wednesday, which will be followed by the results of the FOMC meeting for two days. Investors will search for references to future policy expectations, which in turn will play a major role in influencing the following leg of the directional step of the US dollar pair/JPY.
The Japanese yen weakens more amid a positive risk tone and some stopping before the dangers of events in the central bank
- Before Ukraine talks with Russian President Vladimir Putin, US President Donald Trump expressed optimism that both sides will be able to stop the shooting and eventually a peace deal. This comes in addition to the China’s Special Code to Promote the Local Consumption announced during the weekend and remains a supporter of the optimistic market mood.
- Japanese Finance Minister Katsonobo Kato spoke at his usual press conference on Tuesday and said that bond markets should dictate the return movements. Kato added that the government will respond appropriately while allowing the market forces to pay bond prices fluctuations. This follows a brief rise in the return on Japanese government bonds for 40 years to a record level.
- The preliminary results of the annual Spring Employment negotiations in Japan, which were concluded on Friday, showed that companies have largely agreed to union demands for a strong wage growth for the third year in a row. This consumer spending is expected to enhance and contribute to high inflation, which in turn gives a bank in Japan to maintain interest rates.
- In contrast, traders are now pricing the possibility of 25 basis points to reduce interest rates in all of June, July and October amid concerns about the American economic slowdown by customs tariffs, signs of a cooling labor market, and reduce inflation. This may destroy the US dollar’s restoration from its lowest level since October 2024 on Monday.
- On the Economic Data Front, the US Statistical Office on Monday told the US retail sales in the United States to 0.2 % in February compared to the revised drop of the bottom of 1.2 % in the previous month. However, this was less expectations for a 0.7 % increase, indicating caution and consumer and convincing evidence of the Federal Reserve Reserve in its policy reduction course soon.
- Traders are now looking at the US economic Dockket on Tuesday – which is characterized by the issuance of construction permits, housing and industrial production data – for some motivation. However, the focus will remain attached to the decisive decisions that BOJ fed on Wednesday, which will play a key in determining the next station of the directional step of the USD/JPY pair.
The dollar/JPY can climb about 150.00 psychological marks; 100 SMA periods on the graph for 4 hours carrying the key
From a technical perspective, the collapse can be considered overnight than the SMA SIA (SMA) on the graph for 4 hours and the subsequent power is higher than 149.00 marks as a major operator for bulls. Moreover, the aforementioned graph fluctuations have gained a positive traction and support for additional gains. Thus, some follow -up force, again towards restoring the psychological mark 150.00, appears as a distinctive possibility. However, you are likely to face any other harsh resistance and remain covered near the 150.75-150.80 area, which represents 200 SMA points on the graph for 4 hours.
On the other side, it appears that the area of ​​149.20, followed by a mark 149.00 and the 148.80 region (200 SMA periods on the graph for 4 hours) now protects the direct downside. A convincing break will indicate less than the aforementioned support levels that the last move that it witnessed last week or so has run out from Steam and the withdrawal of the dollar pair/JPY to support 148.25-148.20 on its way to the 148.00 mark. The declining track can extend towards the area of ​​147.70, 147.20 regions, and 147.00 marks before the immediate prices eventually decrease to re-test the lowest level in several months, about 146.55-146.50 the area that was touched on March 11.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by providing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
