At the Jackson Hole meeting last weekend, Chairman Powell pointed out risks of weaker employment. This increased expectations for a September rate cut, and USD/JPY fell from 148.60 to 146.58. Because U.S. PMI results were stronger than expected the day before, there had been some dollar buying earlier, which made the market reaction even stronger.
Powell’s comments showed again that rate cuts are coming, so the dollar selling may have only just begun. Now, the market is likely to focus more on yen movements.
Inflation above 2% has continued for more than three years, but the market still does not expect a rate hike this year. Depending on the results of the Tokyo area CPI (Consumer Price Index) at the end of this week, USD/JPY could fall further.
Today’s forecast range for USD/JPY: 146.60 – 147.60 yen
This week’s forecast range for USD/JPY: 145.90 – 147.90 yen
Note: This information does not guarantee profits. Please make your own decisions when trading.