In Tokyo trading, Bank of Japan (BOJ) member Nakagawa made comments showing a stricter stance such as ‘the environment for raising rates has slightly improved since April’ and ‘we are not behind the curve.’
Also, Japan’s bond auction was weak, which pushed Japanese interest rates higher and made the yen stronger. At the same time, US long-term interest rates went down, so USD/JPY fell from the morning high of 147.48 to the upper 146 level.
In the New York market, there was some buying back, but selling of the dollar continued because of lower trust in the Federal Reserve, and USD/JPY dropped to 146.67.
With US interest rates falling and Japanese rates rising, the gap between the two narrowed, making it hard for USD/JPY to go higher.
Depending on the result of the US PCE (Personal Consumption Expenditures Price Index) inflation data announced today, USD/JPY might fall below the post-Jackson Hole low of 146.58, possibly down to around 146.00.
However, this area is seen as strong support because it matches the Fibonacci 61.8% level, the 90-day moving average, and the lower line of the Bollinger Band.
Expected USD/JPY Range: 146.00 – 147.40 yen
Note: This information does not guarantee profits. Please make your own decisions when trading.