During Tokyo trading, news that Ms. Takaichi may run in the LDP leadership race led to yen selling, and together with dollar short-covering before the CPI release, USD/JPY rose to 147.99.
After the CPI came out higher than the previous month, the pair went up further to 148.14 but was quickly pushed back. Year-on-year CPI was as expected, so it was not strong enough to stop a possible rate cut next week. U.S. long-term interest rates went down, and USD/JPY fell to 146.99.
Dollar buying stopped around the low 148 level, where the 200-day moving average and Bollinger band upper line are, making it hard to go higher. Still, global stock gains and Japan’s political worries are supporting USD/JPY.
After dropping more than 1 yen from the high, some short-term buying may come back, but the 148 level is heavy resistance.
USD/JPY Forecast Range: 146.70 – 147.80 yen
Note: This information does not guarantee profit. Please make your own trading decisions.