USD/JPY rebounded in a single day, monitoring the rise in UST yields after US PPI information got here in hotter. Pair was final at 146.87, OCBC’s FX analysts Frances Cheung and Christopher Wong observe.
Financial actions in Japan could assist BoJ coverage normalization
“Subsequent clarification that Scott Bessent didn’t ask Japan to hike charges additionally added to the USDJPY’s rebound. Pair rose to close 148 at one level in a single day however has now eased decrease. Stronger than anticipated 2Q GDP aided the pullback in USDJPY this morning. This bolstered our view that there’s room for BoJ to pursue coverage normalization.”
“We indicated earlier than that wage development, broadening companies inflation and upbeat financial actions in Japan ought to proceed to assist BoJ coverage normalization. We reiterate our view {that a} resumption of Fed-BoJ coverage divergence ought to underpin the course of journey for USDJPY to the draw back.”
“Every day momentum is gentle bearish whereas RSI fell. Dangers stay skewed to the draw back. Rapid assist at 146.40 (50 DMA), 145.50 (100 DMA) and 144.10 (61.8% fibo retracement of April low to August excessive). Resistance at 147.80 (21 DMA), 148.32 (23.6% fibo).”
