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- The Japanese yen captured a three -day winning chain against the dollar on Wednesday.
- Trade optimism in the United States and China is greatly visible to the safe JPY.
- Supports the modest dollar of the US dollar US dollar/JPY before the FOMC policy decision.
The Japanese yen (JPY) remains on his background against his American counterpart, although the downside is still present amid mixed basic signals. Optimism about the abolition of trade tensions between the United States and China-the two largest economies in the world-in order to defend risks, which in turn is seen under the undermining of safe traditional assets, including JPY.
However, the expectations that the Bank of Japan (BOJ) will appeal the cycle of prices after stopping the stopping last week and reducing the geopolitical risk of JPY losses. At the same time, and US dollar (USD) is struggling to get any meaning of the meaning where traders choose to wait for the results of the FOMC meeting for two days. This also contributes to determining the restoration of the dollar pair of the dollar from the lowest level per week.
The Japanese yen is undermined by declining demand for safe calm; Negative potentials seem limited
- US Treasury Secretary Scott Beesen, along with the American commercial actor, Jameson Jarir, will travel to Switzerland later this week to hold trade talks with Chinese Deputy Prime Minister Ho Living. This comes after BESSENT said on Tuesday that the Trump administration could announce trade deals with some of the largest trade partners early this week and enhance investor confidence.
- This, in turn, is seen by undermining the demand for the traditional assets of the safe and pressure on the Japanese yen during the Asian session on Wednesday. The US dollar, on the other hand, turns higher after a three -day loss series, amid some trade that re -places sites before FOMC decisive decision and raises the pair of the dollar/JPY over the 143.00 brand.
- The Federal Reserve is expected to leave interest rates unchanged at the end of the two -day policy meeting. Thus, the market focus will be on the accompanying policy statement. Regardless of this, the comments of the Federal Reserve Chairman will be examined by Jerome Powell at the press conference after preparing to obtain signals on the future traveled path, which will lead to the payment of the dollar in the short term.
- Meanwhile, the Bank of Japan repeated last week that it is still committed to raising prices more if the economy and prices are in line with its expectations. Moreover, the expectations that exceed the high wages enhances spending on consumers and inflation in Japan keep the door open to further normalization of policy through high interest rates by the end of this year.
- Meanwhile, a Kremlin spokesman warned that there was an appropriate response immediately if Ukraine did not cut the fire. In addition, the security cabinet in Israel unanimously agreed to a plan to expand the military attack in Gaza and gradually control the region. This keeps geopolitical risks to play and must reduce JPY losses deeper.
The technical preparation of the US dollar/JPY supports the prospects for the emergence of new sellers near 143.55-143.60
From a technical perspective, last week failed near the SMA 200 (SMA) moving average on the graph for 4 hours and the downsides in the subsequent fall. Moreover, the volatile in the daily graphs/every hour holds negative lands, indicating that the path of less resistance to the pair of the dollar/JPY remains on the negative side. Thus, any other move may still be seen as a sales opportunity near the 143.55-143.60. This, in turn, must achieve instant prices near the 144.00 brand. This is followed by the supply zone 144.25-144.30, which, if it is decisive, may lead to an increase in high prices and raising prices to the psychological brand 145.00.
On the other hand, it appears that the area of 142.35, or the lowest level of the week, now protects the direct negative side of the dollar pair/JPY 142.00 marks. The convincing under the latter can make immediate prices vulnerable to speeding up the decline towards the next next support near the 141.60-141.55 area on its way to the round number 141.00.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by providing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
