Image Source: Pixabay
 

• Japanese yen remains near 142 per dollar, close to its lowest levels in over seven months
• Bank of Japan reiterates its commitment to maintaining an ultra-loose monetary policy for the sustainable achievement of the 2% inflation target and wage growth
• BOJ keeps its short-term interest rate target at -0.1% and 10-year bond yields around 0%
• Federal Reserve skips rate hike in June but hints at two more quarter-point rate increases this year
• European Central Bank implements 25 basis point rate hike and signals further tightening
• Bank of England expected to raise rates in the upcoming meeting

The Japanese yen shows limited movement against the dollar in today’s trading session. In the daily interval, the market is currently experiencing a balanced price range, creating an environment where traders may rely on extreme levels to determine rotational scenarios.

From a technical standpoint, the short-term perspective suggests a potential target towards the previous upper value extreme, which could attract yen long positions. However, the indications from the Federal Reserve regarding two more rate hikes strengthen the case for the dollar, exerting pressure on the Japanese currency. If absorption above the current swing highs of dollar long positions occurs, it may lead to a reversal in the USD/JPY rate towards the downside.

The yen could experience upward momentum against major currencies if there are hints of an earlier-than-expected dovish tone from the US Federal Reserve or if US economic data shows signs of weakness. Additionally, in times of increased risk or potential US recession concerns, investors tend to seek safety in the yen and assets such as gold.

In the median-term, a weaker dollar could provide a boost to the yen, while the ultra-easy monetary policy approach adopted by the Bank of Japan to support the Japanese economy puts downward pressure on the currency’s value.

More By This Author:

WTI Crude Futures Under Pressure As China’s Demand Estimate Is Cut
US Stock Futures Flat As Market Takes A Pause From Previous Rally
Chinese Stock Market Slips As Investors Await PBOC’s Loan Prime Rate Decision