Japanese Yen Faces Selling Pressure Amid Economic Concerns

The Japanese Yen encountered renewed selling interest around the 149.000 level, leading to a decline on Tuesday. Despite data from Japan's labour ministry revealing a continued decline in real wages and household spending, the Bank of Japan (BoJ) faces challenges amid a generally positive sentiment in equity markets, weakening the safe-haven appeal of the JPY.

From a technical standpoint, analysis of the monthly chart indicates a strong resistance level dating back to October 2022, suggesting a potential reversal pattern. Our strategy focuses on identifying entry points based on smaller timeframes, targeting the 140.000 area as the nearest support zone.

(USD/JPY Monthly Chart )

Conversely, the US Dollar (USD) remains supported by expectations of prolonged high interest rates by the Federal Reserve (Fed), fueled by robust US macroeconomic data and hawkish remarks from FOMC members. However, the BoJ's recent hawkish stance, signaling confidence in achieving inflation targets and potential interest rate adjustments, may limit further JPY losses.

Investors anticipate wage growth to surpass 2023 levels, potentially facilitating the BoJ's exit from ultra-loose monetary policies. This cautious outlook advises against overly aggressive bullish positions on the USD/JPY pair, urging careful consideration before anticipating significant intraday appreciation.

Our Idea:

Below 152.000 look for further downside with 145.000 & 140.000 as targets.

Trade active:

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