Japanese Yen Lifted By Boj Pivot Forecasts

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Japanese Yen Lifted By Boj Pivot Forecasts

Japanese Yen (Jpy) Lifted By Boj Pivot Forecasts

The Japanese Yen (JPY) was lifted after the release of better-than-expected inflation figures. The recent CPI report has shown a consistent slowdown in the inflation. This has increased the chances of a policy pivot from the BoJ.

The USD/JPY is en route toward the significant resistance at 151.00 with a slightly bearish bias. The uncertainty is expected to remain in the Dollar-Yen pair as markets look toward the Fed and BoJ.

Meanwhile, the S& P 500 will likely open in green as the overnight futures showed a bullish trend last night. At the same time, the DXY is down and seen near 103.70 on renewed hopes of a rate cut happening in the next few months.

Bond Yields Down To 4.25%

After the comments from Fed Williams, the 1o year bond yields also dropped and touched a low of 4.25%. With a decline in the bond yields and the DXY, the prospects of a bullish USD/JPY have become even lower.

In the next few days, the PCE data for January will be released, which is expected to influence the USD/JPY trajectory. This economic indicator will also shed much-needed light on when to expect a Fed rate cut.

According to the FedWatch tool (CME), the March and May meetings will not lead to rate cuts. As a result, the 5.25% - 5.50% interest rate range will stay effective for the next 2-3 months.

Conversely, the market players believe that the June meeting will yield a rate cut of 0.25%, which will lower the policy rate in the country.

Amidst all of this, some Fed members are discussing the need to maintain the current interest rate level in the country.

If we look at Japan's side, the CPI was already released, which suits the JPY. The overall report shows strong evidence that inflation is on the path to dipping under the 2% threshold. A move this way will increase the chances of one of the first-rate hikes from the BoJ.

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