US Economic Calendar
Later in the session on Wednesday, the FOMC Meeting Minutes will require investor consideration. Speculation about multiple 2024 Fed rate cuts has pulled the USD/JPY to 145.
Concerns about the US labor market and support for multiple rate cuts could affect US dollar demand. Comments on the size of a September rate cut may be crucial for the USD/JPY pair.
According to the CME FedWatch Tool, the probability of a 50 basis point September Fed rate cut was 24.5% on Tuesday, compared to 75.5% for a 25-basis point cut. A 50-basis point September rate cut could fuel speculation about a 100-basis point cut to the FFR in September, November, and December.
A more dovish Fed rate path may support a USD/JPY fall through 143.
Expert Views on the US Labor Market
Arch Capital Global Chief Economist Parker Ross remarked on the New York Fed’s latest Labor Market Survey, stating,
“Key Takeaway: There is growing concern about job loss and a corresponding decline in workers expecting to move to a new employer, particularly among workers aged 45 and under. The results of this survey are yet another reflection of how concerned consumers are about the labor market, even as the Fed has only recently declared it “balanced.”
A deteriorating US labor market may give the doves the upper hand, possibly supporting a more aggressive 50-basis point September rate cut.
Short-term Forecast: Bearish
USD/JPY trends will depend on trade data from Japan, upcoming services PMIs (Thurs), and central bank forward guidance. Positive data from Japan and support for a Q4 2024 BoJ rate hike could pull the USD/JPY below 143. Weak data from the US and rising bets on a 50-basis point September Fed rate cut may signal a fall toward 140.
Investors should remain alert. Monitor real-time data, central bank insights, and expert commentary to adjust your trading strategies accordingly. Stay updated with our latest news and analysis to manage USD/JPY volatility.
USD/JPY Price Action
Daily Chart
The USD/JPY sat well below the 50-day and 200-day EMAs, confirming the bearish price trends.
A USD/JPY breakout from the 145.891 resistance level would support a move toward 147.500. A return to 147.500 could give the bulls a run at the 148.529 resistance level and the trend line.
Economic indicators from Japan, the FOMC Meeting Minutes, and central bank commentary require consideration.
Conversely, a drop below 145 could give the bears a run at the 143.495 support level. A fall through the 143.495 support level may bring the 141.032 support level into play.
The 14-day RSI at 31.65 suggests a USD/JPY break below 145 before entering oversold territory.
