USD/JPY fell on feedback from US Treasury Secretary Scott Bessent on Fed and BoJ. Pair was final at 146.55, OCBC’s FX analysts Frances Cheung and Christopher Wong observe.
Dangers skewed to the draw back
“He instructed Bloomberg TV his opinion that BoJ is behind the curve in addressing inflation and that he had mentioned inflation in Japan with BoJ Governor Ueda. He added that ‘In order that they’re going to be climbing and they should get their inflation drawback beneath management’. On Fed, he instructed a 50bp lower in September.”
“We’ve lengthy argued {that a} resumption of Fed-BoJ coverage divergence ought to underpin the path of journey for USD/JPY to the draw back. Wage development, broadening providers inflation and upbeat financial actions in Japan ought to proceed to help BoJ coverage normalisation.”
“Day by day momentum turned delicate bearish whereas RSI fell. Dangers skewed to the draw back. Quick help at 146.40 (50 DMA), 145.50 (100 DMA) and 144.10 (61.8% fibo retracement of Apr low to Aug excessive). Resistance at 147.80 (21 DMA), 148.32 (23.6% fibo).”
