USD/JPY Shows Signs of Recovery Following Ueda's Cautious Tone, Key Technical Levels in Focus
Ueda's cautious comments signal that policymakers are hesitant to make significant moves, including abandoning negative borrowing costs.
NEWS
3/3/20241 min read
USD/JPY Shows Signs of Recovery Following Ueda's Cautious Tone, Key Technical Levels in Focus
The yen experienced minor setbacks against the U.S. dollar on Friday, following a positive performance in the previous session. This decline was influenced by remarks from Bank of Japan Governor Kazuo Ueda, who suggested that inflation in Japan is declining rapidly and that achieving the price goal remains uncertain.
Ueda's cautious comments signal that policymakers are hesitant to make significant moves, including abandoning negative borrowing costs. This reluctance reduces the chances of a surprise rate hike at the upcoming BoJ meeting in March, contrary to speculation among certain traders on Wall Street.
Looking ahead, sustained recovery for the Japanese currency would require yield differentials to shift in favor of the yen. However, this change is unlikely to occur significantly until the BoJ concludes its sub-zero rate policy. Recent indications from the central bank suggest that this transition may occur around April.
From a technical perspective, USD/JPY demonstrated an upward shift leading into the weekend, finding support around 149.70. If upward momentum continues, the next obstacle lies at 150.85. Further strength and clearance above this level will draw attention to the 152.00 mark.
Conversely, a resurgence of bearish sentiment leading to a decisive drop below 149.70 could prompt increased selling pressure, potentially driving prices towards 148.90. Continued decline below this critical level may signal a move towards 147.50, slightly above the 100-day SMA.