- USD/JPY snaps the recent winning streak ahead of US data.
- A slew of solid US data could underpin the US Dollar.
- S&P Global anticipates that Japan could see upward interest rates trajectory, beginning in 2024.
USD/JPY trades lower around 149.70 during the European session on Friday, snapping a three-day winning streak that began on Tuesday. Despite reaching weekly highs, the USD/JPY pair has experienced a pullback, attributed to the retreat in the US Dollar (USD).
The US Dollar Index (DXY) trades lower around 106.30 by the press time, retreating from the weekly highs. The US Dollar (USD) weakens due to the downbeat US Treasury yields, with the 10-year US bond yield standing at 4.64%, down by 1.23% at the time of writing.
The economic landscape in the United States has been dynamic, which could limit the losses of the US Dollar (USD). The Consumer Price Index (CPI) exceeded expectations in September, with an annual expansion of 3.7%, slightly surpassing the estimated 3.6%.
Additionally, the modest increase in Initial Jobless Claims for the week ending on October 6, slightly below the forecasted 210K at 209K, suggests a nuanced trend indicating a mild easing.
This positive US economic data has reignited a hawkish sentiment regarding the Federal Reserve's (Fed) interest rate trajectory, which could support underpinning the USD/JPY pair. The upbeat indicators have introduced complexity to the ongoing narrative, leading to speculation about the Fed's potential response.
Investors are anticipated to closely monitor the release of the US Michigan Consumer Sentiment Index on Friday. This index serves as a crucial gauge of consumer confidence, providing insights into the broader economic sentiment. The ongoing analysis of these indicators is likely to influence trading decisions in the USD/JPY pair.
The Japanese Yen (JPY) experienced weakness due to the Bank of Japan's (BoJ) continuous adherence to an ultra-easy monetary policy. BoJ board member Asahi Noguchi has drawn attention on Thursday by expressing a lack of optimism about the acceleration in wage growth.
Noguchi attributes inflation to import price hikes, including currency factors, and emphasizes that there is still a considerable distance to achieving the 2% inflation target. These insights from a BoJ official contribute to the ongoing narrative surrounding the Japanese Yen and the central bank's monetary policy stance.
According to S&P Global's assessment of the Japanese economy and monetary policy, the rating agency anticipates that policy interest rates in Japan could experience an upward trajectory, beginning in 2024.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.