Markets Analysis

USD/JPY falls, yen rises on expectations of BOJ policy normalization【September 12, 2023】

September 12, 2023

Markets Analysis

Fundamental Analysis

  • Japan’s long-term interest rates are at 0.7% for the first time in 10 years, with a tendency towards a stronger yen.
  • Governor Ueda commented that if there’s confidence in price inflation, there are various options available.
  • Expectations of normalization of Bank of Japan policy lead to yen buying, putting brakes on the strengthening dollar.

USDJPY Technical Analysis

Analyzing the daily chart of the USD/JPY exchange rate. After Governor Ueda’s comments, USD/JPY temporarily dropped to the 145 JPY range, but support can be seen at the 24-day moving average. The upward momentum has weakened, and the RSI remains flat within the range of 57 to 65. If it falls below this short-term moving average, the decline might accelerate.

With the announcement of the US CPI approaching, today’s market is expected to continue yesterday’s trend. Market participants are focusing on the US CPI announcement, so cautious movement is likely to continue.


Day Trading Strategy (Hourly)

Analyzing the 1-hour chart of the USD/JPY exchange rate, there’s a gap down. The 24-day moving average has crossed below the 240-day moving average, forming a death cross. This 24-day moving average is acting as resistance.

There’s a pause in the dollar’s strength, and it’s expected that dollar buying will be restrained until tomorrow’s US CPI announcement. The RSI has dropped below 57 and is heading towards 50, so attention to this movement is essential. The market today is likely to continue with a stronger yen trend.

As for the trading strategy, consider short entry at 146.55 JPY and 146.65 JPY, with a stop at 147 JPY, and a profit target at 146.19 JPY. It’s preferable to enter once a trend towards a stronger yen is confirmed.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

146.65 JPY – Resistance line (240-day moving average)
146.17 JPY – Price zone of significance on the daily chart
145.90 JPY – Recent lows


Market Sentiment

USDJPY Sell: 64% Buy: 36%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
UK Employment Statistics15:00
Eurozone ZEW Economic Sentiment Index18:00

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

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