Key points:
USD/JPY continued its upward climb, nudging up to 153.62 as Tokyo markets opened with the yen showing little strength against a rallying dollar.
Picture: The USDJPY shows upward momentum, closing at 153.861 with a recent high at 153.898, while MACD signals mild bullish sentiment, as seen on the VT Markets app.
The trend remains bullish with the USDJPY continuing its upward movement. Traders should watch for a break above 153.898 to confirm further upside potential, while monitoring the 153.500 support as a key level to maintain the current trend.
A weaker yen often gives Japanese exporters an advantage, and today, that story played out in the stock market. Japanese automakers like Suzuki Motor, up 5.5%, and financial giants like Mizuho, up 2.6%, surged as traders grew optimistic about earnings in light of the yen’s slump.
Recruit Holdings added fuel to the fire, posting an impressive 5.0% gain after revising its revenue and profit forecasts for the year.
Across the Pacific, though, traders are eyeing inflation and what it means for the USD’s next move. Tomorrow’s US Consumer Price Index data could reveal a 3.3% increase in core inflation for October, marking the third consecutive month at this rate.
This steady inflation profile keeps the Fed’s options open, with a December rate cut still on the table, but only if the data doesn’t bring surprises. Bank of America economists remind us that inflation risks lean upwards.
See also: Dollar Rises Ahead of Fed Speakers
The interplay of fiscal policies, potential tariff hikes, and immigration constraints could add fuel to the inflation fire, pushing the Fed to rethink its approach.
At the heart of these inflation dynamics is the US dollar itself, which has been gaining strength and turning heads in Tokyo as Japanese companies wonder just how much further USD/JPY could go.
With core inflation steady at 3.3% and markets bracing for any shifts, the dollar’s climb leaves many questioning whether USD/JPY will test higher levels before year-end.
As US bond yields climb and the Fed weighs its options, USD/JPY seems poised to continue testing upper levels.
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