Jpy Rises Further On Risk Off

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Jpy Rises Further On Risk Off

Japanese Yen (Jpy) Rises Further On Risk-Off Mood

The Japanese Yen (JPY) continues its bullish ascend for the 3rd session in a row on Wednesday. The appreciation of the Japanese Yen (JPY) is stemming from the improved risk-off flows.

Next week, the Bank of Japan (BoJ) meeting is scheduled, and the central bank is highly likely to raise the interest rates. That's also a reason why many short-sellers are closing their positions to prevent any excessive losses.

Boj Expected To Raise Rates

member of the ruling party recently urged the BoJ to properly communicate its plan for monetary policy normalization. In other words, the member wants the BoJ to show its plans to gradually hike the interest rate.

Recently, the Prime Minister of Japan also commented on how the BoJ's normalization policy will help the economy to grow quickly.

On the USD front, there are numerous challenges, but the biggest one is the rising odds of a rate cut in September. So, that's yet another factor which is weighing heavily on the USD/JPY pair. As of now, the odds of a Sep rate cut are standing at 93.6%, which shows a big change from the earlier value of 88.5%.

Additionally, high-volatility data from the US is expected this week, including the PMI, Q2 GDP, and more. On the one hand, these figures will provide insights into the US economy. On the other hand, it will also provide data to the Federal Reserve for adjusting the monetary policy.

USD/JPY is seen trading near 155.20 on Wednesday, while the D1 chart shows that the price action is contained inside an ascending channel. The short-term trend is dovish as evident from the RSI under 50.

However, if the RSI breaks under the 30 level, it will be a sign of oversold conditions and could send the USD/JPY higher for a short-term rebound.

Overall, the stakes are really high for the USD/JPY, with the big decision from the BOJ expected tomorrow. Generally, a rate hike could further reinforce a bearish bias for the USD/JPY, sending it to new lows.

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