Last week, USD/JPY first moved up, but later fell after the U.S. CPI was weaker than expected and Bessent, a U.S. official, said a 0.5% rate cut is needed. He also said Japan must control inflation, which the market took as a hint for a possible rate hike in Japan. This led to yen buying, and USD/JPY dropped to 146.22.
However, because of the summer holiday season, the pair moved only in a small range of 2.30 yen during the week.
This week, the focus is on Federal Reserve Chairman Powell’s speech at Jackson Hole. If he shows support for a rate cut because of weaker jobs, the dollar will likely stay weak. At the same time, Japan’s July CPI will be released. If the number is lower as expected, the chance of an early Bank of Japan rate hike will fade, and the yen may weaken.
As a result, USD/JPY may stay in a narrow range again, with both the dollar and yen under selling pressure.
Today’s forecast range for USD/JPY: 146.80 – 147.80 yen
This week’s forecast range for USD/JPY: 146.00 – 148.50 yen
Note: This is not a guarantee of profit. Please make your own decisions when trading.