USD/JPY fell sharply amid the pullback seen in USD as Trump commerce unwinds. Pair was final at 151.95 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong word.
JPY set to proceed to regain energy
“Bullish momentum on every day chart light whereas RSI fell from close to overbought circumstances. Close to time period more likely to see additional pullback. Help at 151.55 (200 DMA), 150.60/70 ranges (50% fibo retracement of Jul excessive to Sep low, 100 DMA). Resistance at 153.30 (61.8% fibo), 155 and 156.50 (76.4% fibo).”
“Governor Ueda stated that the present political scenario in Japan wouldn’t cease him from lifting charges if costs and the economic system keep in keeping with BoJ’s forecast. He additionally made reference to FX charges extra more likely to have an effect on costs in Japan than earlier than. He additionally stated that comparable wage offers subsequent 12 months as this 12 months could be good however there’s not a lot info on subsequent 12 months’s shunto but. General, his remarks have been extra hawkish than anticipated and is more likely to have paved the best way for BoJ hike in Dec, which stays our home view.”
“Latest labour market report additionally pointed to upward wage strain in Japan with 1/ jobless charge easing, 2/ job-to-applicant ratio growing to 1.24 and three/ even feminine labour participation charge rose to1.2ppts (vs. a 12 months in the past). Japan’s commerce union confederation (or Rengo) is once more calling for wage enhance of 5% or extra total and 6% or extra for SMEs for 2025. Wage progress stays intact, alongside broadening providers inflation and that is supportive of BoJ normalizing charges whereas JPY ought to proceed to regain energy.”
