Usdjpy Moves Up

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Usdjpy Moves Up

Usd/Jpy Moves Up To 142.50, All Eyes On Boj

While everyone was thinking that the Fed's rate cut would send the USD/JPY lower, it has actually moved higher! The USD/JPY has already crossed the 142.50 and is now facing some pressure on Friday.

The risk-averse tone of the market has made it difficult for the USD/JPY to secure more gains. Also, the Japanese CPI was hot, supported the JPY, and capped the upside in USD/JPY.

Policy Divergence Between Fed-Boj Grows

But, the bigger theme in the USD/JPY is the policy divergence between the BoJ and the Federal Reserve. If this divergence continues, the long-term trend of USD/JPY will change to bearish.

If we look at yesterday's price action, USD/JPY was near 143.00 and was showing signs of consolidation. The RSI was near 50, while the 9 EMA was pointing at an upward correction.

The nearest resistance levels for the USD/JPY are 143.00, 143.73, and then 145.00. As for the support levels, the first one is around 142.00, followed by the next one at 140.00. Similarly, the June 2023 low of 139.58 will also be a major support level for USD/JPY.

Today is an important day for the USD/JPY as the Bank of Japan will announce its policy decision. The forecast shows that the central bank will take no action at this point but will leave the room open for future rate hikes.

Also, the Japanese CPI is also due later today which will help the BoJ to shape its monetary policy. A hotter inflation will be helpful for BoJ to raise the rates.

Things have gotten really interesting for the USD/JPY. On the one hand, the Fed has started its policy easing with a massive -0.50% rate cut.

On the other hand, BoJ has picked a hawkish stance that is 180 degrees different from that of the rest of the world. In fact, the BoJ has already raised the rates a few times and is ready to do it again if the data warrants it.

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