USDJPY Sees Slight Yen Strength, BOJ Governor Comments on Future Rate Hikes【April 5, 2024】

Fundamental Analysis

• The number of US unemployment insurance claims has increased for the first time in a year, with today’s US employment statistics drawing attention.
• The BOJ Governor indicated a willingness to raise interest rates further if progress towards targets increases.
• Major countries including the US have issued strong warnings to Israel, raising Middle East risks.

USDJPY technical analysis

Analyzing the daily USDJPY chart, it appears slightly weakened and is trading around 151JPY. It corresponds to the first Gotobi day of the new fiscal year, leading to active midpoint trading and a possible emergence of yen buying demand.

Furthermore, strong warnings from major countries, including the US, towards Israel have been issued consecutively. Concerns have grown following airstrikes on food aid workers, leading to a slight escalation in the Middle East situation. As a result, oil prices briefly approached 87USD, with the significant 90USD mark drawing near.

Some view this as risk-averse yen buying, but the range has not been definitively broken, and it may be prudent to trade cautiously until today’s employment statistics are released.

Day trading strategy (1 hour)

Analyzing the 1-hour USDJPY chart, the currency pair fell from around 151.70JPY to 151.00JPY. This could be due to real demand for yen buying on the Gotobi day. The 151.00JPY level corresponds to the lower limit of the range, and how far it will fall is worth noting.

However, it is true that it is difficult to determine the direction until today’s employment statistics are released. While the ADP employment report exceeded market expectations, so did the number of unemployment insurance claims. There have been frequent occurrences where the ADP employment statistics and government employment statistics have differed significantly, making simple predictions inadvisable.

There have been reports of some Fed officials commenting on the “possibility of no rate cuts within the year.”

As for day trading direction, the plan is to engage in short-term selling rotations during Tokyo hours, observe during London hours, and determine the direction after seeing the results of the employment statistics in the NY market.

Support/Resistance lines

The following are support and resistance lines to consider:

151JPY….Lower limit of the range

Market Sentiment

USDJPY Sell: 68% Buy: 32%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.