- Amid strong selling pressure, the USD/JPY currency pair has been on a downward trajectory throughout this week, reaching a support level of 152.14 at the time of writing - its lowest point in over three months.
- Obviously, this decline coincides with a growing expectation among traders that the Bank of Japan will raise interest rates again next week, forcing short sellers to exit their positions.
- Toshimitsu Motegi, a senior official in the ruling party, has urged the Bank of Japan to clarify its plan for normalizing monetary policy by steadily raising interest rates, adding that excessive yen declines negatively impact the economy.
For his part, Japanese Prime Minister Fumio Kishida also said that the normalization of the central bank’s monetary policy would support Japan’s transition to a growth-based economy. Currently, financial markets see a chance of about 44% for a 10-basis point rate hike by the Bank of Japan next week. The yen’s rise this month was initially driven by what market participants attributed to government intervention, with data from the Bank of Japan indicating that authorities may have purchased nearly 6 trillion yen between July 11 and 12 via intervention.
Today. According to the results of the economic calendar, the U.S. economy is likely to grow by 2% year-on-year in the second quarter of 2024, up from 1.4% in the first three months of 2024. Despite the increase, it would represent the slowest consecutive quarter of growth since 2022, falling short of the quarterly average of 3.1% growth from 2021 to 2023, indicating a slowdown in the economy amid rising interest rates. In the second quarter, consumer spending is likely to rebound and rise by 2.2%, up from 1.5% in the first quarter, and inventories are likely to account for nearly 1% of the growth, according to the Atlanta Federal Reserve’s GDP estimate. However, residential investment is likely to contract after double-digit growth in Q1, and net trade is expected to have a negative impact on growth due to lower exports.
Top Forex Brokers
USD/JPY Technical Analysis and Expectations Today
According to the performance on the daily chart below, the general downtrend for the USD/JPY pair is strengthening and the path is paved for a move towards the psychological support of 150.00. Obviously, that’s confirming the recent move and at the same time will push the technical indicators towards strong oversold levels. Technically, the currency pair will remain under this pressure until the Bank of Japan announces next week. Today, the USD will react to the announcement of the US GDP growth reading, the weekly jobless claims number and the durable goods orders.
Want to trade our daily forex analysis and predictions? Here's a list of forex brokers in Japan to check out.