USD/JPY traded decrease intra-day after BoJ Governor Ueda known as for vigilance over meals inflation dangers. Japan’s core inflation hit 3.5% in April, accelerating at its quickest annual tempo in additional than two years due largely to a 7% surge in meals prices. Pair was final at 143.83 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong notice.
Dangers stay skewed to the draw back
“Hotter than anticipated knowledge retains BoJ hike hopes alive and stays according to our view that wage development, broadening companies inflation and upbeat financial actions in Japan ought to proceed to help BoJ coverage normalisation though tariff uncertainty could quickly delay coverage normalisation within the close to time period.”
“Whereas the timing of BoJ coverage normalisation could also be deferred, coverage normalisation isn’t derailed. Fed-BoJ coverage divergence and USD diversification theme ought to nonetheless help USDJPY’s broader course of motion to the draw back.”
“Every day momentum is delicate bearish whereas RSI fell. Dangers stay skewed to the draw back. Subsequent help at 142, 141.60 earlier than 139.90 (current low in Apr). Resistance at 144.40/60 ranges (21 DMA, 23.6% fibo retracement of 2025 excessive to low) and 145.70 (50 DMA).”
