The yen lost significant value to hit 143 yen per dollar for the first time since last November as soft economic data put pressure on the currency. The latest data show that inflation in Japan unexpectedly slowed down in May, while core inflation continued to exceed the central bank’s target of 2% for 14 consecutive months. PMI data also shows a contraction in manufacturing activity in Japan in June, while activity in the service sector slowed down. In monetary policy, Bank of Japan Governor Kazuo Ueda reaffirmed the bank’s determination to maintain an extremely loose policy to achieve sustainable 2% inflation along with rising wages. Earlier in June, the Bank of Japan decided to keep interest rates very low and did not change its current yield curve control policy, maintaining a rather cautious approach despite market expectations and the ongoing tightening of monetary policy in other major economies.
USD/JPY Weekly Forecast June 26 — 30, 2023
Quotes of the currency pair Dollar to Yen USD/JPY complete the trading week with growth near the area of 143.41. The pair continues to move as part of the rise and the bullish channel. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines up, which indicates pressure from buyers of the US dollar and a potential continuation of growth already from current levels. At the moment, we should expect an attempt to develop a price reduction and a test of the support level near the area of 140.75. Then, a rebound up and the continuation of the growth of the pair to the area above the level of 157.85.
An additional signal in favor of the rise of the Dollar/Yen pair in the current trading week will be a test of the trend line on the relative strength index (RSI). The second signal will be a rebound from the lower border of the bullish channel. Cancellation of the growth option for the USD/JPY pair in the current trading week June 26 — 30, 2023 will be a fall and a breakdown of the 135.45 area. This option will indicate a breakdown of the support area and the continued fall of the pair on Forex to the area below the level of 132.35. The USD/JPY growth will be confirmed by the breakdown of the resistance area and the closing of the price above the level of 146.75.
Among the important news from Japan that may have an impact on the rate of the Japanese Yen, it is worth highlighting: Japan Retail Sales m/m.
USD/JPY Weekly Forecast June 26 — 30, 2023 suggests an attempt to test the support level near the 140.75 area. Where should we expect the pair to continue rising to the area above the level of 157.85. An additional signal in favor of growth will be a test of the trend line on the relative strength index (RSI). Cancellation of the pair’s rise option will be a fall and a breakdown of the level of 135.45. This will indicate a continued decline in the pair with a potential target below the 132.35 area.
