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- The Japanese yen rose after a speech by Bank of Japan Governor Kazuo Ueda.
- Japan’s national consumer price index rose 2.8% year-on-year in July, remaining at its highest level since February.
- Federal Reserve Chairman Jerome Powell may make a statement on the possibility of cutting interest rates at the Jackson Hole Symposium.
The Japanese Yen (JPY) rose against the US Dollar (USD) after the release of the National Consumer Price Index (CPI). Price Index Japan inflation data and Bank of Japan Governor Kazuo Ueda’s speech in parliament on Friday. Ueda said, “The Bank of Japan raised interest rates in July as the economy and inflation moved broadly in line with expectations.”
Bank of Japan Governor Ueda also indicated that there would be no change in the stance on adjusting monetary easing if the economy and inflation continue to be in line with expectations. Ueda noted that Bank of Japan Policy decisions were appropriate and cautioned that determining the future course of policy could lead to unnecessary speculation.
the USD/JPY The pair fell as the US dollar came under downward pressure from lower Treasury yields. However, the US dollar gained further strength after mixed global Purchasing Managers’ Index (PMI) data from S&P on Thursday.
Moreover, the United States Federal Reserve Federal Reserve Chairman Jerome Powell is scheduled to speak at the Jackson Hole Symposium later on Friday. Powell may make a statement on the possibility of a U.S. interest rate cut, which market participants are eagerly awaiting.
Daily Market Movers Summary: JPY advances after BOJ Governor Ueda’s speech
- Japan’s national consumer price index rose 2.8% on-year in July, holding steady for a third straight month and remaining at the highest level since February. In addition, the national consumer price index excluding fresh food rose 2.7%, the highest reading since February, in line with expectations.
- The US composite Purchasing Managers’ Index (PMI) fell to 54.1 in August, its lowest level in four months, from 54.3 in July, but remained above market expectations of 53.5. This indicates that US business activity continues to expand, marking 19 consecutive months of growth.
- The S&P/PMI for the US services sector rose to 55.2 in August 2024, from 55.0 in July, defying expectations for a decline to 54.0. Meanwhile, the manufacturing PMI fell to 48.0 in August from 49.6 the previous month, missing market expectations of 49.6 and signaling a second straight contraction in US factory activity at the fastest rate this year.
- On Thursday, Boston Federal Reserve President Susan Collins expressed confidence in the U.S. central bank’s ability to bring down inflation without triggering a recession, and signaled her support for starting to cut interest rates next month. “I think there’s a clear path to achieving our goals without unnecessary slowdowns and with the labor market remaining healthy,” Collins told Reuters in an interview in Jackson Hole.
- Kansas City Federal Reserve Bank President Jeff Schmid said in an interview with CNBC in Jackson Hole that he is closely studying the factors behind the high unemployment rate and will rely on the data to determine whether to support a rate cut next month.
- Minutes from the July Federal Open Market Committee meeting indicated that most Fed officials agreed last month that they are likely to cut benchmark interest rates at the next meeting in September as long as inflation continues to slow.
- Japan’s goods trade balance narrowed to a deficit of ¥621.84 billion in July, reversing a surplus of ¥224.0 billion in June and missing market expectations of a deficit of ¥330.7 billion. Japan’s imports rose 16.6 percent on-year in July to a 19-month high of ¥10,241.01 billion, much faster than the 3.2 percent gain in June. Meanwhile, exports rose 10.3 percent on-year to a seven-month high of ¥9,619.17 billion, missing market expectations of 11.4 percent.
Technical Analysis: USD/JPY is falling towards 145.50 around the downtrend line
The USD/JPY pair is trading around the 145.60 level on Friday. analysis From daily table The pair appears to be above a downtrend line, indicating a weakening bearish bias. However, the 14-day RSI remains slightly above 30, suggesting that the downtrend may still be intact.
As for support levels, the USD/JPY pair is testing the downtrend line at 145.50. A break below this level could reinforce the bearish bias and push the pair to sail around the seven-month low of 141.69, recorded on August 5. Further declines could push the pair towards the rebound support level at 140.25.
On the positive side, the USD/JPY pair could face immediate resistance around the 9-day exponential moving average (EMA) at 146.46. A break above the 9-day EMA could support the pair to test the resistance level at 154.50, which has moved from previous support to current resistance.
USD/JPY: Daily Chart
Japanese Yen Rate Today
The table below shows the percentage change in the value of the Japanese Yen (JPY) against the major currencies listed today. The Japanese Yen was the strongest against the US Dollar.
| US Dollar | euro | GBP | JPY | Almost | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| US Dollar | -0.14% | -0.12% | -0.47% | -0.15% | -0.23% | -0.45% | 0.14% | |
| euro | 0.14% | 0.02% | -0.31% | 0.00% | -0.09% | -0.07% | 0.28% | |
| GBP | 0.12% | -0.02% | -0.34% | -0.04% | -0.11% | -0.07% | 0.02% | |
| JPY | 0.47% | 0.31% | 0.34% | 0.31% | 0.24% | 0.24% | 0.38% | |
| Almost | 0.15% | -0.01% | 0.04% | -0.31% | -0.08% | -0.05% | 0.06% | |
| Australian Dollar | 0.23% | 0.09% | 0.11% | -0.24% | 0.08% | 0.03% | 0.12% | |
| New Zealand Dollar | 0.45% | 0.07% | 0.07% | -0.24% | 0.05% | -0.03% | 0.10% | |
| Swiss Franc | -0.14% | -0.28% | -0.02% | -0.38% | -0.06% | -0.12% | -0.10% |
The heat map shows the percentage changes of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the Japanese Yen from the left column and scroll along the horizontal line to the US Dollar, the percentage change displayed in the box will be JPY (base)/USD (quote).
Frequently Asked Questions About Japanese Yen
The Japanese Yen (JPY) is one of the most traded currencies in the world. Its value is largely determined by the performance of the Japanese economy, but more specifically by the policy of the Bank of Japan, the spread between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is to control the currency, so its moves are of great importance to the yen. The BOJ has intervened directly in currency markets at times, generally to depress the yen, though it has often refrained from doing so due to political concerns in its major trading partners. The BOJ’s current ultra-easy monetary policy, underpinned by massive stimulus to the economy, has caused the yen to weaken against its major peers. This process has been exacerbated recently by the growing political divergence between the BOJ and other major central banks, which have opted to raise interest rates sharply to combat decades-high inflation.
The Bank of Japan’s ultra-easy monetary policy stance has widened the gap between the policies of other central banks, especially the US Federal Reserve. This supports a widening gap between the US and Japanese 10-year bonds, which is in favour of the US dollar versus the Japanese yen.
The Japanese yen is often viewed as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money into the Japanese currency due to its perceived reliability and stability. Turbulent times are likely to boost the value of the yen against other currencies that are perceived as riskier to invest in.
