USD/JPY Price Forecast – US Dollar Plunges After CPI Numbers

US Dollar vs Japanese Yen Technical Analysis

The US dollar has fallen rather hard against the Japanese yen during trading on Thursday, slicing through the 50-Day EMA. This is because inflationary numbers have dropped a bit more than anticipated, with the month over month number coming out at 0.4%, when it was expected to be 0.6%. The year-over-year number came in at 7.7%, as opposed to 7.9%.

Unemployment claims in America came in a little higher than anticipated as well, so perhaps people are starting to think that the Federal Reserve has done its job, and that inflation is heading in the right direction. The biggest problem with this thinking is that it does not allow for the fact that it’s likely that monetary policy will be tight going forward regardless. At this point, it’s not really overly concerning whether the next interest rate hike is 50 basis points or 75, the reality is that it’s going to be a very tight Federal Reserve.

On the other hand, we have the Bank of Japan that has stated its desire to do everything he can to fight rising interest rates, meaning that the market is more likely than not going to continue to see the Japanese yen dumped into the marketplace. As long as that is going to be the scenario, it’s difficult to imagine that the Japanese yen will pick up strength, at least for a sustainable amount of time. A bit of a correction could be coming, but quite frankly I welcome that correction because it gives us the opportunity to pick up cheap US dollars in a trade that should continue over the longer term.

USD/JPY Price Forecast Video for 11.11.22

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