USD/JPY Declines as Reports Suggest the Government Will Allow a BOJ Rate Hike
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Daily Market Analysis
Expert analysis of today's market movements and trading opportunities
Fundamental Analysis
- Expectations for a Bank of Japan rate hike have risen sharply after reports that the government will approve a December hike
- The market has started to price in this possibility
- USD/JPY has fallen below the baseline and dropped to the 155 yen level, increasing downward pressure
USD/JPY Daily Chart – Trading Strategy
USD/JPY has fallen below the baseline and dropped to the 155 yen level, increasing downward pressure. The Takai administration is reported to support a December hike, making it seem like an increasingly likely scenario. The BOJ likely wants to avoid a market shock, especially after the sharp stock decline following the July 2024 hike.
The mid-154 yen area is expected to act as a support zone.
USD/JPY Day-Trading Strategy
USD/JPY briefly fell to the mid-154 yen level before recovering to the 155 yen range. However, with expectations of a BOJ rate hike and a potential Fed rate cut, yen-buying pressure may gradually increase. For now, a "sell on rallies" approach seems appropriate.
If USD/JPY rises back to the mid-155 yen level, it may offer a good opportunity to enter short positions. The overall trend is weakening, and further downside should be considered.
Key Economic Indicators Today
| Indicator | Time |
|---|---|
| Eurozone GDP (Q3) | 19:00 |
| Canada Employment Statistics (Nov) | 22:30 |
| US University of Michigan Consumer Sentiment | 24:00 |
| US Personal Income (Sep) | 24:00 |
| US Personal Consumption Expenditure (Sep PCE) | 24:00 |
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![[Special Edition] When Will the Bank of Japan's Next Rate Hike Come?](/_next/image/?url=%2Fimages%2Fmarket-analysis%2F20251031USDJPYDAY.webp&w=3840&q=75&dpl=dpl_7SfEmfY5qN3s6kwvddBMm6MTPkyg)
[Special Edition] When Will the Bank of Japan's Next Rate Hike Come?
The Bank of Japan decided to keep its policy rate unchanged at around 0.5%. Governor Kazuo Ueda stated that the BOJ would closely watch wage negotiations in next spring's "Shuntō" before making any policy changes.
USD/JPY Faces Resistance as BOJ Keeps Policy Unchanged
The Bank of Japan decided to maintain its current policy settings. Markets are focusing on whether the Governor will mention a possible rate hike in his press conference. Meanwhile, although the U.S. has already begun rate cuts, opinions differ on a possible additional cut in December.
USD/JPY Forms Double Top, Downtrend Ahead?
USD/JPY is forming a double top pattern, trading in the low 151 range. Goldman Sachs forecasts a potential return to around 100 if interest rates continue rising over the next decade. The FOMC meeting is scheduled for early tomorrow with a rate cut already priced in.
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