USD/JPY Rebounds, Voices Claiming BOJ’s Rate Hike is Practically Difficult【January 3, 2024】

January 03, 2024

Markets Analysis

Fundamental Analysis

  • Possible impact on Nikkei Average due to Ishikawa Noto earthquake followed by aircraft fire at Haneda Airport
  • Excessive speculation on U.S. rate hikes recedes, leading to a stronger dollar trend in major currencies
  • Opinions suggest that a historical earthquake makes BOJ’s rate hike practically difficult

USDJPY Technical Analysis

Analyzing USD/JPY technicals. The Ishikawa Noto earthquake caused significant damage from the beginning of the year on the Sea of Japan side, and recovery is expected to take time. In the U.S., the release of FOMC minutes is awaited, with an anticipated dollar rise. BOJ’s rate hike is viewed as difficult due to the earthquake, leaning towards a weaker yen.

USD/JPY has rebounded at 140.75 JPY, the midpoint of the recent uptrend, surpassing the Ichimoku conversion line. Though not out of a downtrend, it may return to around 143 JPY, where the 240-day moving average lies.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of USD/JPY. The market environment is conducive to a rise in USD/JPY due to receding U.S. rate hike speculation and BOJ’s rate hike speculation. A continuation of USD/JPY’s rise is expected today. Particularly, breaking above the 240 moving average near 142.30 JPY is a focal point.

Day trading strategy: Consider selling on a rebound at 142.30 JPY, with a target of 141.53 JPY and a stop at 142.90 JPY.

Support and Resistance Lines

Upcoming resistance lines to consider:

143.00 JPY – 240-day moving average on daily chart
140.75 JPY – Midpoint of recent daily uptrend


Market Sentiment

USDJPY Sell: 40%, Buy: 60%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
German Unemployment Rate17:55
ISM Manufacturing PMIMidnight
FOMC MinutesFollowing day 4:00 AM

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

Open an account for free!

Sign up >