Next week’s foreign exchange forecast (US dollar/yen) “Is the weakness of the US dollar a weak point of the rise of the US dollar/yen?” Harons FX 2024/4/27 – Gaitame.com Money Education Channel

Written by: Naoto Ono, Gaitame.com Research Institute

Date and time of writing: April 26, 2024 14:14

USD/JPY reached 156 yen level

The US dollar/yen pair rose to 156.202 yen as the interest rate differential between Japan and major countries became more conscious due to strong stock prices, long-term US interest rates remaining at a high level of 4.6%, and the Bank of Japan’s failure to become more hawkish. The range has widened, and the price has reached a new high every day for the first time in 34 years. (Each rate level is as of the time of writing)

FX live commentary, if you are waiting for the push after intervention, watch this first (April 25, 2024)

*Market trends are also explained on a program broadcast by Gaitame.com Research Institute’s TEAM Harrons.

Maintaining the upward direction…

Next week, we will be looking at Japan’s yen-purchasing intervention and looking at U.S. employment indicators to assess the appropriateness of starting to cut U.S. interest rates in September, which is now becoming the consensus. Regarding the employment situation in the United States, high-frequency data such as the number of new unemployment insurance applications and the Indeed Job Posting Index suggest that employment in the United States is slowing down. In addition, the U.S. Purchasing Managers’ Economic Index shows that business activity slowed in April, employment growth slowed slightly, and there are signs of excess production capacity, indicating a slowdown in the pace of U.S. economic growth. I started to become aware of it. Although we do not think there will be a major decline in NFP as consumption continues to be resilient, I feel that there is a good chance that expectations will be disappointed.

If US employment and conditions are strong, there is hope that the US dollar will be supported and the US dollar/yen pair will expand upward. However, I would like to be wary of the fact that the US dollar is currently not growing against other major currencies. The dollar index, which measures the strength and weakness of the US dollar, has recently been on a plateau.

Regarding Japan’s monetary policy, the Bank of Japan has stated that “accommodative financial conditions will continue for the time being,” so there is a tendency for a weaker yen to be biased. “We will continue to make adjustments,” the Bank said, unchanged from its stance of raising interest rates by the end of the year. In the near term, it seems likely that the USD/JPY will test an upward trend due to the “accommodative stance”, but as people gradually become conscious of “adjusting the degree of easing”, the USD/JPY will likely stagnate. it might be.

The top price target is around 157.11 yen (technical analysis)

The US dollar/yen pair is expected to move upwards to 155.290 yen, which is double the decline from the February 13th high (150.882 yen). If we can break above this, I think the next target will be around 157.110 yen, the 100% line of the Fibonacci expansion starting from the low price of December 28 last year. In the near term, it looks like the price will be a battle around 155.30 yen. On the other hand, in the downward direction, the change line of the daily Ichimoku Kinko Hyo (154.416 yen, as of the 25th) and the 21-day moving average line (153.201 yen, as of the 25th) are likely to be noticed.

[USD/JPY chart daily]

Source: Gaitame.com “Gaikan Next Neo”
Expected range:USD/JPY：153.500-157.500

Events for the week of 4/29:

Gaitame.com “Economic Indicators Calendar”

One word comment

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