The content of the minutes of the last meeting of the US Federal Reserve increased the discrepancy between its policy and the policy of the Bank of Japan, which has negative interest, which brought the USD/JPY currency pair more positive momentum, and accordingly it moved strongly upward with gains that reached the resistance level 146.56, its highest in nine months. It settled around the level of 146.30. The US dollar is still the strongest against the rest of the other major currencies in light of the continued tightening of the Federal Reserve's policy and the US economy not being exposed to recession as a result of that policy.
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Public statements from other Fed officials since the July meeting suggest that the strong degree of consensus supporting the aggressive tightening campaign of the past year-and-a-half may be fading.
Some, like Philadelphia Fed President Patrick Harker, have indicated that the US central bank may not need to continue raising interest rates. Others, including Fed Governor Michael Bowman, took the opposite view. Investors do not currently expect another price hike this year, according to the futures contract, despite the implied possibility of a hike on Oct. 31-November. The first meeting is higher than their next meeting on September 19-20. Fed watchers will hear a possible signal from Powell at the Fed's annual Jackson Hole conference in Kansas City, Wyoming, next week.
Forecasts of the US dollar against the Japanese yen:
- The general trend of the USD/JPY currency pair is still bullish.
- Its recent and continuous gains were enough to push all technical indicators towards strong overbought levels.
- It seems that the bulls are determined to move the currency pair higher until an expected Japanese intervention occurs in currency markets to prevent further collapse.
This event may bring the currency pair strong profit-taking sales, as a result of which it is not ruled out that it will return to the vicinity of the support levels 140.00 and 136.00, respectively.
According to the current performance, if the dollar/yen pair moves towards the resistance level of 147.60, there will be more talk about the next most important move, the psychological summit of 150.00, during which a Japanese intervention occurred in the markets, and the currency pair collapsed as a result towards the support level of 129.00 in January of this year.
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