Image Source: Pixabay
The Japanese Yen (JPY) retains its bullish bias through the Asian session on Thursday and climbs to a four-week high against its American counterpart amid reviving bets for a Bank of Japan (BoJ) rate hike next week. The expectations were reaffirmed by the BoJ Governor Kazuo Ueda’s hawkish comments, pushing yields on Japanese Government Bonds (JGBs) to multi-year highs. In contrast, the US Treasury bond yields retreated sharply on Wednesday in reaction to benign US inflation data. The resultant narrowing of the US-Japan yield-differential is seen as another factor undermining the JPY. Meanwhile, rising bets that the Federal Reserve (Fed) could cut interest rates twice this year, along with easing fears about US President-elect Donald Trump’s disruptive trade tariffs, remain supportive of the risk-on mood. This, in turn, caps gains for the safe-haven JPY, which, along with a modest US Dollar (USD) uptick, assists the USD/JPY pair to rebound over 50 pips from the daily through, around the 155.20 area. Trades now look forward to the US economic docket – featuring the release of monthly Retail Sales figures and the usual Weekly Initial Jobless Claims data – for short-term opportunities.
Japanese Yen bulls retain control amid reviving bets for a BoJ rate hike next week
USD/JPY might struggle to capitalize on intraday recovery beyond the 156.00 mark
Any further slide is likely to find some support near the 155.00 psychological mark, below which the USD/JPY pair could slide to the 154.55-154.50 region. The latter represents the lower boundary of a four-month-old upward-sloping channel and should act as a key pivotal point. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for an extension of the recent retracement slide from a multi-month peak touched last Friday. Spot prices might then weaken further below the 154.00 mark and test the next relevant support near the 153.40-153.35 horizontal zone. On the flip side, any attempted recovery might now confront resistance near the 156.00 mark ahead of the 156.35-156.45 region and the 156.75 area. Some follow-through buying, leading to a subsequent strength beyond the 157.00 mark, might shift the bias back in favor of bullish traders and lift the USD/JPY pair to the 155.55-155.60 intermediate hurdle en route to the 158.00 round figure. The momentum could extend further towards challenging the multi-month peak, around the 158.85-158.90 region.More By This Author:Australian Dollar Extends Gains, Upside Limited Silver Price Forecast: XAG/USD Struggles Near $29.65 Area, Seems Poised To Weaken Further US Dollar Index Price Forecast: Sits Near Two-Year Peak, Above 109.00 Ahead Of US NFP