- The USD/JPY currency pair remained relatively stable above the 153.60 resistance level, even after the Bank of Japan's announcement and ahead of a slew of important US economic data.
- As announced today, the Bank of Japan unanimously maintained its short-term policy interest rate at around 0.25% during its October meeting, keeping it at its highest level since 2008 and in line with market expectations.
Thursday’s decision came amid a shift in the political landscape following the Japanese elections and ahead of the US presidential election. Meanwhile, Bank of Japan Governor Kazuo Ueda highlighted concerns about the increasingly uncertain global economic outlook, noting that the central bank has time to analyze risk factors after implementing rate hikes in March and July.
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The policy board remains committed to further rate hikes if economic data and prices are in line with its expectations. In its quarterly forecast, the Bank of Japan maintained its core inflation forecast of 2.5% in fiscal 2024, with inflation expected to be around 1.9% for both fiscal 2025 and fiscal 2026. As for GDP, the BoJ maintained its growth forecast for 2024 at 0.6%. In addition, it expects growth of 1.1% for fiscal 2025 and 1.0% for fiscal 2026.
In contrast, yesterday and According to the results of the economic calendar, US GDP sees moderate growth of 2.8% in the third quarter, slightly below market expectations. The US Bureau of Economic Analysis reported a 2.8% increase in real GDP for the third quarter of 2024, a slight decrease from the 3.0% growth seen in the previous quarter and below market expectations. GDP growth was largely driven by higher consumer spending, exports, and federal government spending.
However, higher imports also had an impact on the overall GDP calculation. Consumer spending increased on both goods and services, particularly nondurable goods such as prescription drugs, motor vehicles, health care services, and food. Exports also expanded, especially in capital goods, while federal spending increased significantly in defence-related areas. The slowdown in GDP growth during the third quarter can be attributed to lower private inventory investment and residential fixed investment. However, this was offset by gains in exports, consumer spending, and government spending, despite higher imports.
Also, GDP in current dollars rose 4.7% to $29.35 trillion in the third quarter. Meanwhile, the overall domestic purchases price index rose 1.8%, while the personal consumption expenditures price index rose 1.5%. Meanwhile, energy and food costs are excluded, the personal consumption expenditures index rose 2.2%.
Personal Income Trends
Personal income rose $221.3 billion in the third quarter, driven by strong growth in compensation. Disposable personal income rose $166.0 billion, or 3.1%, for a real gain of 1.6%. moreover, this paper highlights the uneven performance of the U.S. economy in the third quarter, demonstrating resilience in the face of several sectoral headwinds. furthermore, the “second” estimate for this quarter is due on November 27, 2024, and is expected to shed more light on the economic picture. Personal savings declined in the third quarter, falling from $1.13 trillion to $1.04 trillion compared to the previous quarter.
USD/JPY Technical analysis and Expectations Today:
According to the performance on the daily chart, the general trend of the USD/JPY price is still bullish. As we expected before, the trend will remain so until the reaction to the announcement of the US jobs numbers and the US inflation reading preferred by the Federal Reserve, then monitoring the US elections next week.
According to the current trend, the closest resistance levels to the performance will be 153.85, 155.00 and 155.90 respectively, which are enough to push all technical indicators towards strong overbought levels.
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