Yesterday, the expectation that Chinese authorities would announce additional economic stimulus measures on the 12th led to a “risk-on” movement, causing the yen to weaken. At the same time, the rise in US long-term interest rates resulted in more dollar buying, pushing the USD/JPY exchange rate higher. The USD/JPY dropped to 148.01 yen in the Tokyo market but rose to 149.35 yen in the New York market, closing at a high level. The fact that it did not fall below 148 yen suggests strong support.
The US Consumer Price Index (CPI) to be announced today is expected to show slowing inflation. However, if it turns out to be higher than expected, the view that the Federal Reserve (FRB) will lower interest rates aggressively might weaken, leading to a test of the 150 yen level. However, 150 yen is a strong psychological resistance level, and even if it briefly breaks through, it is expected to quickly pull back.
If the exchange rate stays above 150 yen, further gains towards around 150.60 yen (50% Fibonacci retracement level) could be in sight.
USD/JPY forecast range: 150.20 yen (upper Bollinger Band limit) to 148.60 yen.
*Please note that the above content does not guarantee profits, and you should make your own decisions when trading.