Usdjpy Remains Flat Below 139 With Limited Downside

Usdjpy Remains Flat Below 139 With Limited Downside by Ashly Chole last updated on August 24, 2023

USD/JPY Remains Flat Below 139.50 With Limited Downside

The USD/JPY pair isn't staging any impressive recoveries during the last few days. In fact, it wouldn't be wrong to say that the pair is experiencing selling pressure.

For now, the USD/JPY is trading below 139.60 - 139.50 and has already lost 0.15% for the day. This has pushed the USD/JPY back into the trading range where it has been spending most of its time in the last few weeks.

USD/JPY Forecast For Bearish Leg

The expectations regarding a stop to the rate hike policy have picked up steam in the last few weeks. If this turns out to be true, it would be bearish for the USD and bullish for the JPY. According to experts, that's one of the factors which is keeping the USD/JPY depressed in the short to medium term.

In addition, the inflation data is also due, which is the reason why this rate hike saga started in the first place. But now that inflation is expected to go down, the interest rates will also go down with it. These are the factors that are weighing on the greenback and thus keeping the USD/JPY at its current levels.

While talking about USD/JPY, we also can't discount the fact that even Japanese authorities are known to intervene in the FX markets. When coupled with JPY safe haven status and economic slowdown, all the things point toward more downside in the USD/JPY.

In Japan, the stance will likely remain dovish, which is in turn not allowing the JPY to truly show its strength against other currencies. If we get any hawkish signals from Japan, it would add strength to the JPY and thus will become visible in all the JPY pairs, such as USD/JPY, EUR/JPY, and GBP/JPY.

For now, the US side of the economic docket is full of surprises that will decide where the USD/JPY pair will go from here!