The Japanese Yen (JPY) attracts fresh sellers following an intraday uptick led by stronger domestic consumer inflation figures amid expectations that increased political uncertainty could delay the Bank of Japan's (BoJ) rate-hike plan. Moreover, elevated US Treasury bond yields, bolstered by expectations that US President Donald Trump's policies could boost inflation and force the Federal Reserve (Fed) to cut rates slowly, is seen weighing on the lower-yielding JPY.
Adding to this, the prevalent risk-on environment is seen as another factor denting demand for the safe-haven JPY. This, along with sustained US Dollar (USD) buying interest, contributes to the USD/JPY pair's goodish intraday bounce of over 80 pips from sub-154.00 levels. That said, fears that Japanese authorities might intervene in the FX market to prop up the domestic currency might hold back the JPY bears from placing aggressive bets and cap the currency pair.
From a technical perspective, the USD/JPY pair has been showing some resilience below the 154.00 mark, which now coincides with the 100-period Simple Moving Average (SMA) on the 4-hour chart. Adding to this, oscillators on the daily chart are holding in positive territory, suggesting that any subsequent slide towards the 153.30-153.25 area, or the weekly low, could be seen as a buying opportunity.
Some follow-through selling below the 153.00 mark, however, could drag the USD/JPY pair to the next relevant support near mid-152.00s en route to the 152.00 round figure. The said handle coincides with the 200-day Simple Moving Average (SMA) and should act as a key pivotal point for short-term traders.
On the flip side, immediate support is pegged near the 155.00 psychological mark, above which the USD/JPY pair could climb to the 155.40 supply zone. A sustained strength beyond the latter could lift spot prices beyond the 156.00 round figure, towards the 156.25-156.30 intermediate hurdle en route to the multi-month peak, around the 156.75 region touched last week.
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Nov 22, 2024 14:45 (Prel)
Frequency: Monthly
Consensus: -
Previous: 54.1
Source: S&P Global
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