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MENAFN- Daily Forex)
- At the beginning of this week, the weakness of the Japanese yen prompted new verbal warnings.
- The Japanese yen fell below 149.10 yen against the US dollar on Monday before recouping some losses, prompting Atsushi Mimura, the chief currency diplomat, to issue a new verbal warning against speculative movements in the foreign exchange market.
According to the forex market trading, the Japanese yen came under pressure last week when Japan's new Prime Minister Shigeru Ishiba and his Economy Minister Ryusei Akazawa called for caution before raising interest rates further in light of the current economic conditions. At the same time, the stronger-than-expected US jobs report on Friday contributed to the markets ruling out any chances of another 50-basis point rate cut by the Federal Reserve in November.
Now, Investors are looking ahead to Japanese wage data this week to gauge its implications for inflationary pressures and monetary policy.
According to stock trading platforms, Japanese stocks rose as the yen weakened. According to trading, the Nikkei 225 index of Japanese stocks rose 2.1% to exceed 39,000 points, while the broader TOPIX index jumped 1.8% to 2,742 points on Monday, with Japanese stocks rising for the third straight session as the yen weakened sharply, raising earnings expectations for Japanese export-heavy industries. Clearly, these moves came as the Japanese yen was pressured by a stronger-than-expected US jobs report that boosted hopes that the US Federal Reserve would achieve a soft landing. Meanwhile, senior Japanese officials called for caution from the Bank of Japan before raising interest rates further. Also, Investors prepared for earnings reports from major Japanese companies this week, including AEON, Fast Retailing and Seven & I Holdings. All sectors participated in the rally, with notable gains from the index's major stocks such as Mitsubishi UFJ (4%), Advantest (3.3%), SoftBank Group (3.7%), Toyota Motor (2.7%), and Hitachi (3.8%).
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money USD/JPY Technical Analysis and Expectations Today:
Now, USD/JPY pair is trading at levels slightly above the 100-hour moving average. As a result, the pair is currently trading deep within the overbought levels of the 14-hour Relative Strength Index. In the short term, and based on the hourly chart performance, the USD/JPY pair is trading within an ascending channel formation. Also, the 14-hour Relative Strength Index supports an upward bias after the deep rise in overbought conditions. Therefore, bulls will seek to extend current gains towards 151.49 or higher to resistance at 153.85. On the other hand, bears will seek to capitalize on declines at around 146.00 or lower at support 143.51.
In the long term, according to the daily chart, the USD/JPY pair has completed an upward breakout from a descending channel formation. Likewise, the 14-day RSI supports a bullish bias as it moves towards overbought conditions. Therefore, bulls will target long-term gains around 156.87 or higher at the 160.00 resistance. On the other hand, bears will look to pounce on gains around 140.52 or lower at the 136.97 support.
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