You are here: Home > articles > Forex > The yen may have already executed a long-term reversal. Overview of USD/JPY
The yen may have already executed a long-term reversal. Overview of USD/JPY
May 24, 2024 3:22 amVideo
Latest News
- The yen may have already executed a long-term reversal. Overview of USD/JPY May 24, 2024
- Analysis of EUR/USD pair on May 23rd. Buyers make a second attempt to test the 1.0880 level May 23, 2024
- Analysis of GBP/USD pair on May 23rd. American reports saved the dollar May 23, 2024
- Forecast of EUR/USD pair on May 23, 2024 May 23, 2024
- Forecast of GBP/USD pair on May 23, 2024 May 23, 2024
- USD/JPY: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- GBP/USD: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- EUR/USD: Simple trading tips for novice traders on May 23rd (US session) May 23, 2024
- GBP/USD: trading plan for the US session on May 23rd (analysis of morning deals). Buyers hit resistance at 1.2760 May 23, 2024
- EUR/USD: trading plan for the US session on May 23rd (analysis of morning deals). The euro rebounded from the 1.0819 level May 23, 2024
- Technical analysis – US 500 index slips after all-time high but holds within bullish area May 23, 2024
- Nvidia set to propel Wall Street to new highs but Fed uncertainty weighs – Stock Markets May 23, 2024
- Trading Signals for EUR/USD for May 23-25, 2024: buy above 1.0834 (200 EMA – rebound) May 23, 2024
- Trading Signals for SILVER (XAG/USD) for May 23-25, 2024: buy above 30.00 (200 EMA – rebound) May 23, 2024
- Forex forecast 05/23/2024: EUR/USD, GBP/USD, USDX, Oil and Bitcoin from Sebastian Seliga May 23, 2024
- Video market update for May 23, 2024 May 23, 2024
- USD/JPY: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- GBP/USD: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- EUR/USD: Simple trading tips for novice traders on May 23rd. Analysis of yesterday’s forex transactions May 23, 2024
- Technical Analysis – EURUSD recovers ground, remaining above downtrend line May 23, 2024
Business activity in Japan is growing at its fastest pace in nearly a year, indicating that economic growth may recover in the second quarter after a decline in the first three months of the year. However, inflationary pressure continues to decrease, raising doubts about the Bank of Japan’s ability to continue raising rates without plunging the economy back into deflation.
The Jibun Bank Japan flash composite PMI index rose to 52.4 in May, marking the fastest growth in activity since August 2023.
At the same time, the overall recovery is accompanied by a decline in production costs, and the rise in product prices has slowed. According to S&P Global, this preludes “softer inflationary pressures across official gauges.” Just an hour after the report was released, the BOJ announced that purchases of Japanese government bonds will remain unchanged in upcoming operations, refraining from making a further reduction. Earlier this month, markets had expected the BOJ to both raise rates and reduce bond purchases, so this news represents a reversal of previous forecasts, thereby increasing bearish pressure on the yen.
The nationwide Consumer Price Index for April was set to be published on Thursday night, and core inflation was expected to slow from 2.6% to 2.2%. If the data is close to the forecasts, the USD/JPY pair may rise, as the likelihood of a BOJ rate hike amid weakening inflation becomes lower.
The net short JPY position has decreased to -10.5 billion, marking the third consecutive week of decline. Despite this, speculative positioning remains firmly bearish, and it is still too early to count on a long-term reversal. The price is below the long-term average and is heading downwards.
The likelihood that USD/JPY formed a long-term high of 160.20 on April 29 is increasing. The pair stopped rising due to a powerful currency intervention by the BOJ (reportedly involving $60 billion). However, over the past three weeks, the yield on 10-year Japanese bonds has closely approached 1%, reflecting the market’s reassessment of future interest rate growth prospects.
We expect the pair to reverse before it approaches 160, so the most reasonable strategy at this stage is to sell on rallies in anticipation of a long-term reversal. The nearest target is 153.40/60, with a local low at 151.78. Consolidation below this level will reinforce the bearish sentiment.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: