USD/JPY Unable to Retake 134.00 Ahead of Key US Data and BoJ
The USD/JPY pair is falling modestly on Thursday as market participants await crucial US economic data and as the Bank of Japan meeting kicks off. It is trading around 133.45, after being unable to keep 134.00, around the same level it had a month ago.
A steady bond market, looking like the calm before the storm, favors limited price action in USD/JPY. US Q1 growth numbers and inflation indicators included in the report, will be watched closely and likely impact on Federal Reserve’s expectations.
The numbers could trigger sharp moves in an already volatile bond market. Treasury bond yields were recovering from monthly lows, and renewed market concerns boosted the demand for Treasuries. It even reduced the odds of a rate hike from the Fed next week. Still, market participants see a final 25 basis points hike, but some consider the possibility of a pause.
The Bank of Japan will announce its decision on Friday. It is the first meeting under Kazuo Ueda. Consensus points to no change in the monetary policy stance. The meeting could turn out to be a non-event for the yen, but there is room for surprises. Any signal about a probable change in the near term could trigger a yen rally.
From a technical perspective, the USD/JPY has been moving with a bearish bias since last week. Currently, the price is approaching key Simple Moving Averages in the daily chart that awaits between 133.30 and 133.00. A close below 133.00 would point to further losses.
Initially, the dollar needs to rise above 134.00 to strengthen again. The next resistance is the 134.40 area, and then attention would turn to 135.00. A daily close well above that mark should suggest more advances ahead.
A steady bond market, looking like the calm before the storm, favors limited price action in USD/JPY. US Q1 growth numbers and inflation indicators included in the report, will be watched closely and likely impact on Federal Reserve’s expectations.
The numbers could trigger sharp moves in an already volatile bond market. Treasury bond yields were recovering from monthly lows, and renewed market concerns boosted the demand for Treasuries. It even reduced the odds of a rate hike from the Fed next week. Still, market participants see a final 25 basis points hike, but some consider the possibility of a pause.
The Bank of Japan will announce its decision on Friday. It is the first meeting under Kazuo Ueda. Consensus points to no change in the monetary policy stance. The meeting could turn out to be a non-event for the yen, but there is room for surprises. Any signal about a probable change in the near term could trigger a yen rally.
From a technical perspective, the USD/JPY has been moving with a bearish bias since last week. Currently, the price is approaching key Simple Moving Averages in the daily chart that awaits between 133.30 and 133.00. A close below 133.00 would point to further losses.
Initially, the dollar needs to rise above 134.00 to strengthen again. The next resistance is the 134.40 area, and then attention would turn to 135.00. A daily close well above that mark should suggest more advances ahead.