The pair has weakened to 145.72, marking a two-week low as the yen strengthens amid a weakening US dollar.
This decline is mainly due to market expectations regarding the measures to be taken by the US Federal Reserve. The minutes of the last meeting of the Fed, recently published, revealed that there is a consensus among monetary policymakers on an imminent reduction in interest rates. Some members advocate immediate action, which fuels speculation about an imminent easing of monetary policy. This anticipation puts downward pressure on the dollar.
Attention will now focus on Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium scheduled for Friday. The financial community is eagerly awaiting his remarks, which could offer clearer indications of the Fed's monetary policy path for the rest of the year.
In Japan, key events include Bank of Japan Governor Kazuo Ueda's speech to parliament, where he is expected to discuss the consequences of the recent interest rate hike. In addition, Japan's inflation data, due out on Friday, will be crucial in assessing the domestic economic environment and could influence future monetary policy decisions by the Bank of Japan.
USD/JPY Technical Analysis
The USD/JPY is currently showing a consolidation pattern around the 146.15 level. A downside breakout is anticipated with the target of 142.88, which is considered a key corrective level. After the correction, the market could start a new growth phase with the target of 150.55, which could extend up to 156.00 if the upper threshold is breached. The MACD indicator supports a long-term bullish outlook, with the signal line located below zero but trending up.
On the hourly chart, the USD/JPY is undergoing a correction phase with a target set at a low of 143.00. After this corrective phase, expectations point to a resurgence of the price, which could reach 147.70 and, if the momentum holds, target 150.55. The Stochastic oscillator underlines this view, with its signal line situated below 80, suggesting a downward movement towards 20 before a likely rebound.
Investors and traders are advised to closely monitor these developments as the outcomes of these events could significantly influence the market dynamics and the trajectory of the USD/JPY pair in the near term.
By RoboForex Analysis Department
Disclaimer: The forecasts contained in this document are based on the author's personal opinion. This analysis cannot be considered as trading advice. RoboForex does not assume any responsibility for trading results based on trading recommendations and reviews contained herein.
