USDJPY Insight

16 באוק׳

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Last week, concerns about inflation due to the U.S. September Consumer Price Index (CPI) eased as the September Producer Price Index (PPI) came out, strengthening expectations for a rate cut within the year. Fedwatch now reflects over a 90% chance of a 25bp rate cut in the November FOMC meeting.
Meanwhile, Japan has yet to provide any clear hints about a rate hike. Recently, Bank of Japan’s Deputy Governor Himino stated that future data must be carefully evaluated. The market interprets this as a delay in Japan's rate hike, expecting it to happen either in December this year or in January next year.
In Europe, due to the recent poor performance of the Eurozone's Manufacturing PMI and inflation falling below target, the ECB is expected to cut rates by 25bp in its October monetary policy meeting.

+ October 16: UK September CPI
+ October 17: Eurozone September CPI, ECB rate decision, U.S. September retail sales

USDJPY surged to the 150 level, but is experiencing a pullback due to resistance in the 149-152 range. If the pullback continues in this range, we expect it to drop to the 140 level and form a box range. However, if there’s a short-term pullback and it rises to 152, resistance is expected at that level, leading to a fall back to the 145 level. If variables cause a breakout above 152, we could see additional upward movement to 154.

If the market moves contrary to expectations, we will quickly adjust our strategy.