USD/JPY Liquidity Take Before 145!

13 Nov 2023

The USD/JPY exchange rate is trading in positive territory for the sixth consecutive day during Monday's Asian trading hours. The exchange rate's growth is supported by higher yields on US Treasury bonds and hawkish comments from Federal Reserve (Fed) Chairman Jerome Powell. Currently, the exchange rate is around 151.70, gaining 0.10% for the day. USD/JPY continues its winning streak for the fifth consecutive day, trading higher around 151.40 during the early European session on Friday. Unexpectedly hawkish comments from Fed Chairman Jerome Powell had a significant impact, boosting yields on US Treasury bonds and strengthening the US dollar (USD) against the Japanese yen (JPY). However, Japanese authorities may consider intervention to curb the advance of the USD/JPY exchange rate in response to these developments. Powell's statement at the International Monetary Fund (IMF) event on Thursday expressed concern that current policies may not be sufficient to curb inflation. Nevertheless, the Japanese yen continues to face pressure as plans to exit accommodative policy may be delayed due to lower wage growth. Decent wage growth is considered a crucial factor for the Japanese central bank to contemplate an exit from prolonged accommodative monetary policy. The market has reached the October 2022 high, and in this area, after breaking an uptrend channel on the daily chart, the market could experience a false breakout of highs, leading to a sharp decline towards 145. Let me know what you think, regards from Nicola, the CEO of Forex48 Trading Academy.