USD/JPY Range: Multi-Day Low of 155.70 to 156.80

USD/JPY Range: Multi-Day Low of 155.70 to 156.80

Key Points:

  • USD/JPY Movements: Multi-day low at 155.70; current range 156.75-156.80.
  • US Inflation Data: May CPI unchanged; yearly CPI dropped to 3.3%.
  • Technical Levels: 155.70 as support; a breakout above 156.80 signals bullish momentum.

On Thursday, during the Asian session, the USD/JPY pair exhibited significant movements. The multi-day low was 155.70, while the current trading range hovered between 156.75 and 156.80. This movement reflects the broader market dynamics influenced by recent and upcoming economic events. The fluctuations in the USD/JPY pair are a testament to the ongoing uncertainty in the global financial markets, particularly influenced by central bank policies and economic data releases.

Hawkish Fed: 2024 Rate Cuts Reduced, CPI at 3.3%

Several key economic events have shaped the current market sentiment. The Federal Reserve’s (Fed) projections released on Wednesday provided a hawkish surprise, indicating fewer rate cuts in 2024—only one compared to the three projected in March. This shift in policy supports the US Dollar (USD), providing a bullish outlook for the USD/JPY pair.

Furthermore, the US consumer inflation figures released on Wednesday revealed softer numbers. The Consumer Price Index (CPI) remained unchanged for May, marking the first time since last June. Yearly CPI dropped to 3.3% from 3.4% in April, and the Core CPI also fell to a three-year low of 3.4%, down from 3.6% in April and 3.5% expected.

BoJ Policy Decision Friday, US PPI and Claims Thursday

The upcoming events will further influence the USD/JPY dynamics. The Bank of Japan (BoJ) policy meeting scheduled for Friday is highly anticipated. Market participants are keen to see if the BoJ will announce any changes, especially a cut in monthly government bond purchases due to a weaker economy. This decision could significantly impact the Japanese Yen (JPY), potentially leading to increased volatility in the USD/JPY pair.

Additionally, Thursday will see the release of the US Producer Price Index (PPI) and the weekly initial jobless claims during the early North American session. These data points will provide further insights into the US economic health and could influence the USD/JPY trading strategy.

Fed’s USD/JPY Support, BoJ’s Policy Watch

The overall risk sentiment continues to influence the Japanese Yen (JPY) demand. The recent shifts in the Fed’s projections have underpinned the USD, supporting the USD/JPY prospects. However, market bulls seem cautious amid uncertainties surrounding the BoJ’s potential policy changes.

USD/JPY Consolidates Between 156.75-156.80; Support at 155.70

From a technical perspective, the USD/JPY pair’s current trading range between 156.75 and 156.80 indicates a consolidation phase following recent gains. The multi-day low 155.70 is key support, while a breakout above the upper range indicates further bullish momentum. Traders will closely monitor these levels, especially in light of upcoming economic events that could provide the necessary impetus for significant movements.