USD/JPY Forecast – US Dollar Pulls Back After Bank of Japan Comments

USD/JPY Forecast Video for 12.09.23

US Dollar vs Japanese Yen Technical Analysis

Bank of Japan Gov. Ureda spoke over the weekend to the Japanese press suggesting that perhaps the Bank of Japan could be able to raise rates by the end of the year if employment figures continue to behave the way they are. That being said, even if they were to raise interest rates at the end of the year, the interest rate differential still favors the US dollar drastically against the Japanese yen, and therefore traders in Asia started selling immediately. However, the reality is that things won’t change anytime soon, and it was more or less an attempt to jawbone the market down. However, the reality is that we continue to see this move to the upside, not only now, but longer term.

If the market were to break above the ¥148 level, then it opens up a move to the ¥150 level, which is something that I fully anticipate seeing before it’s all said and done. Because of this, I think it continues to be a “buy on the dip” situation, and once we got through Asia, that clearly made itself obvious as the European markets came in and started pushing this pair higher again. It’ll be a seem to see how CPI numbers come out on Wednesday, because that could have a major influence on where this pair goes next. In other words, although we are in an uptrend, you do have some noise in the middle of the week that could come into the picture and cause some headaches if you were not careful.

Underneath, the 50-Day EMA sits right around the ¥145 level, and it does look like it’s approaching a previous support level, and it seems like we are going to continue to see plenty of buyers in that area, and therefore I think we’ve got a situation where eventually we do see this market not only reach ¥150, but until the overall attitude changes, I think we probably go much further than that. I have no situation where I’m willing to sell the Japanese yen at the moment.

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