- The Japanese yen depreciated to around 147.20 yen against the US dollar today, Thursday, hitting a month-low after new Japanese Prime Minister Shigeru Ishiba stated that it was still too early to raise interest rates following his meeting with Bank of Japan Governor Kazuo Ueda.
- He said that current economic conditions do not necessitate further interest rate hikes, prompting financial markets to postpone expectations of another rate hike.
The newly appointed Minister of Economy expressed similar sentiments, calling on the Bank of Japan to be cautious about raising interest rates again. On the economic data front, the final reading showed that business activity in Japan remained expansionary for the eighth consecutive month in September amid strong demand. Also, the yen weakened against the US dollar as stronger-than-expected US private employment data supported the view that the Federal Reserve does not need to cut interest rates significantly.
On the stock trading platform front, Japanese stocks rise as the yen weakens. The Nikkei 225 index rose 2% to above 38,500 points, while the broader TOPIX index jumped 1.5% to 2,690 points on Thursday, as the yen fell to a one-month low, boosting shares of Japanese export-heavy companies.
According to reliable trading platforms, the yen weakened after new Prime Minister Shigeru Ishiba said it was too early to raise interest rates further following his meeting with Bank of Japan Governor Kazuo Ueda. Also, Benchmark indices recovered from sharp selling in the previous session, driven by escalating geopolitical tensions in the Middle East. Meanwhile, final data showed that business activity in Japan remained expansionary for the eighth consecutive month in September amid strong demand. As a result, technology stocks led the rally, with strong gains from Lasertec (4.5%), Disco Corp (5.5%), Tokyo Electron (3.1%), SoftBank Group (2.9%), and Advantest (3.8%). Other heavyweight stocks in the index also recorded gains, including Toyota Motor (2.2%), Fast Retailing (2.9%), and Nippon Yusen (4.6%).
USD/JPY Technical analysis and Expectations Today:
The recent move of the USD/JPY pair demonstrates the strength of our recommendations to buy the pair from any downward level when it dipped towards the psychological level of 140.00. We mentioned at the time that the yen's gains might not last long, as the Bank of Japan's shift towards tightening remains cautious. The recent gains, and potentially moving towards resistance at 148.80 and then the psychological resistance of 150.00, represent a significant shift in the overall trend to bullish, according to the daily chart performance. Furthermore, the USD/JPY pair will remain within its current range with an upward bias until reacting to the announcement of US jobs figures tomorrow, which will have a strong and significant impact on the future of market expectations regarding the fate of US interest rates.
Ready to trade our daily USD/JPY forex forecast? Here are the best forex brokers in Japan to choose from.