- The yen could record its first month of gains in 2024 on suspicion of intervention.
- The core PCE price index will play a significant role in shaping the Fed’s policy outlook.
- Japan to release CPI report in Tokyo.
The USD/JPI forecast remains bullish as investors eagerly await key inflation data from the US and Japan. However, despite the recent decline, the yen could see its first month of gains in 2024 amid doubts about Bank of Japan intervention.
–Are you interested in learning more about forex tools? Check out our detailed guide-
The new week comes with US inflation data showing core price increases. The core PCE price index will play a significant role in shaping the outlook for a rate cut in the US. The Fed prefers this measure of inflation because it eliminates any volatile measures and focuses on those that can cause persistence. Therefore, if this figure shows a cooling of the economy, there will be an increase in expectations of a rate cut. On the other hand, the higher-than-expected numbers would likely extend high interest rates in the US.
Meanwhile, Japan will release the Tokyo CPI report, a leading indicator of national inflation trends. The Bank of Japan is hoping for higher inflation in the country, which will allow it to raise interest rates. However, recent data shows a decline, calling into question this outlook.
The yen gained some strength on Friday after Japan’s top currency diplomat, Masato Kanda, issued another warning against a speculative fall in the yen. He said Japan was ready to react at any time, raising fears of possible intervention. There have already been two questionable interventions that have strengthened the yen. However, she has since given up some of her gains.
USD/JPI Key Events Today
There are no major reports from the US and Japan today, and trading could be light due to the US holiday.
USD/JPI Technical Forecast: Bullish momentum remains weak above 156.50
On the technical side, the USD/JPI price pulled back to trade near solid support, consisting of the 30-SMA and the key level of 156.50. However, the bias is bullish as it has made a higher high. The price recently broke above 156.60, but has since traded in a tight range, showing weaker bullish momentum.
–Are you interested in learning more about the best cryptocurrency exchange? Check out our detailed guide-
If the bulls remain weak, a break below the 30-SMA could change sentiment. However, the bullish bias will remain with the price above the support trendline. If the bulls regain strength, the price will retest the resistance level of 158.01.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
