USD/JPY held near 163.50 on Thursday, with the yen retreating slightly after strengthening in the previous session. The currency had been supported by a broader dollar decline following the Federal Reserve's decision to keep interest rates unchanged.
USD/JPY temporary in equilibrium: Multiple factors in focus
USDJPY(Yen) pushes lower The USDJPY(Yen) gained some momentum against the dollar as the pair hit a heavy rejection. Prices were hitting double tops, but a bearish divergence suggested a deceleration in the upward momentum.
USD/JPY Price Forecast: Rising 20-day EMA backs bullish bias
Near the end of the session, the Japanese yen has started to show a slight recovery against the U.S. dollar. This movement is reflected in USD/JPY, which is down nearly -0.3% during the session.
The June rate decision prodded a rally in the Dollar and in response, markets were highly expecting the possibility of a rate hike at today's July rate decision from the FOMC. As Kevin Warsh has said numerous times, inflation is, and has remained well above the Fed's 2% target.
The American currency managed to gain some ground ahead of the key event of the week.
Michael Boutros, FOREX.com Senior Market Analyst, examines the USD/JPY outlook ahead of the Federal Reserve and Bank of Japan rate decisions, highlighting the key technical levels, Treasury yield correlation and why a break above 164 could open the path toward 165. He also explains how market positioning, Fed expectations and BOJ policy could shape the next major move for the Japanese yen.
The US dollar continues to hold the upper hand against most major currencies ahead of the outcome of the latest Federal Reserve meeting. While the base-case scenario remains for interest rates to stay unchanged, markets are also pricing in the possibility of a rate hike.
Falling oil markets put additional pressure on the American currency.
The US dollar shrugged off crude oil's sharp decline following reports of renewed US-Iran negotiations, highlighting underlying demand for the greenback ahead of this week's FOMC meeting. With markets pricing a growing chance of further Fed tightening, attention now turns to Chair Kevin Warsh's guidance and whether DXY and USD/JPY can extend their bullish trends.
Falling oil prices put some pressure on the American currency as demand for safe-haven assets declined.