USDJPY Manipulation pre-NFP with a target of 146.70!

8 Des 2023

USD/JPY is continuing its recovery above 144.00 in Friday's European trading session. The pair is finding relief from Japan's disappointing Q3 GDP data, which halted the Yen's strong ascent against the US Dollar amid signals of a potential policy shift by the Bank of Japan (BoJ). In Thursday's trading, USD/JPY remained anchored at four-month lows, registering a peak-to-trough decline of over 4% before closing the day with a more moderate -2% drop. Despite the intraday recovery, Thursday marked one of the worst days for USD/JPY in over a year, similar to the period when the pair fell below the 140.00 level in the previous November. Growing speculation that the Federal Reserve has concluded its interest rate hikes and is poised to initiate rate cuts in March is putting pressure on the US Dollar. On the contrary, the Bank of Japan is expected to abandon its extremely accommodative monetary policy in the coming months. This, combined with the prevailing risk-off sentiment in the market, is mitigating losses for the safe-haven Japanese Yen. The Yen's robust performance was triggered by surprisingly hawkish comments from Bank of Japan (BoJ) Governor Kazuo Ueda. His unexpected hints at a possible end to the BoJ's negative interest rate regime, possibly early next year, sparked a broad-scale rally for the Japanese Yen. Despite this, I expect a strong post-NFP recovery for the dollar towards the 146.57 zone.