Nag-rally ang Japanese Yen sa 157.00 laban sa USD

　　Pananalapi

　　Nag-rally ang Japanese Yen sa 157.00 laban sa USD

• 　　The Japanese Yen weakens across the board after BoJ announced its policy decision.

• 　　A shortlived spike in the Yen may be testament to an attempt by the Japanese authorities to intervene.

• 　　US PCE Price Index shows higher-than-expected inflation but does little to impact USD/JPY which almost touches 157.00.

　　The Japanese Yen (JPY) plummets to a fresh multi-decade low of 156.99 against its American counterpart on Friday, after the Bank of Japan (BoJ) decided to leave policy settings unchanged and US data continued to show rising inflation in the US.

　　The Yen failed to gain any respite from BoJ Governor Kazuo Ueda‘s remarks during the post-meeting press conference. Despite what looks like an intervention attempt on Friday morning the JPY only temporarily recovered and a heavy selling bias remains. The BoJ’s uncertain rate outlook, signs that inflation in Japan is cooling, and a generally positive tone around the equity markets turn out to be key factors undermining the safe-haven JPY.

　　Apart from this, expectations that the interest rate differential between Japan and the United States (US) will remain wide for some time suggest that the path of least resistance for the JPY is to the downside. Meanwhile, the US Dollar (USD) attracts fresh buyers and reverses a part of the previous days weaker US GDP print-inspired slide to a two-week low amid bets that the Federal Reserve (Fed) will keep rates higher for longer.

　　USD/JPY continues rising after US core PCE data

　　USD/JPY continued rising after the release of March core Personal Consumption Expenditures Price Index (PCE), the US Federal Reserves (Fed) preferred gauge of inflation.

　　US Core PCE showed a higher-than-expected reading of 2.8% YoY, when analysts had expected 2.6% from 2.8% previously, according to the US Bureau of Economic Analysis (BEA). On month, core PCE rose 0.3% in line with expectations and the same as previously.

　　The data only marginally changed the probability of the Federal Reserve making an interest-rate cut in September from 59% on Friday morning prior to the event to 60% after.

　　Other data in the PCE report showed the headline Personal Consumption Expenditures Price Index rising to 2.7%, beating estimates of 2.6% and a prior reading of 2.5%. On month, the PCE rose 0.3% as expected and the same as previous.

　　Personal Income rose 0.5% as forecast and Personal Spending 0.8%, beating estimates of 0.6% and the same as the 0.8% previous.

　　Daily Digest Market Movers: Japanese Yen continues losing ground as bulls seem unimpressed by BoJs policy outlook

• 　　Government data showed on Friday that consumer inflation in Tokyo decelerated sharply in April, which, along with the Bank of Japans decision to maintain the status quo, undermines the Japanese Yen.

• 　　The headline Tokyo Consumer Price Index (CPI) rose 1.8% YoY in April, while core CPI (ex-Fresh Food, Energy) increased by 1.8% YoY during the reported month, both missing consensus estimates.

• 　　A core CPI gauge that excludes both fresh food and energy prices and is closely watched by the BoJ as a gauge of underlying inflation fell below the 2% target for the first time since September 2022.

• 　　The Japanese central bank, as was widely anticipated, left its short-term interest rates unchanged at 0%-0.10% and expects accommodative monetary conditions to continue for the time being.

• 　　The BoJ, meanwhile, lowered its economic growth forecast for the current fiscal year 2024 to 0.8% from the 1.2% estimated previously, while CPI ex fresh food for FY 2024 is seen at 2.8% vs 2.4% prior.

• 　　In the post meeting press conference, BoJ Governor Kazuo Ueda noted that the chance of a prolonged weakness in the JPY is not zero and that the achievement of 2% inflation target is extremely close.

• 　　The US Commerce Department reported on Thursday that the worlds largest economy grew at a 1.6% annualized rate in the January-March period, marking the weakest reading since mid-2022.

• 　　This pointed to a significant loss of momentum at the start of 2024, though was offset by a rise in the underlying inflation, which reaffirmed bets that the Federal Reserve will keep rates higher for longer.

• 　　A Jiji report indicated that the BoJ might buy fewer bonds, pushing Japans five-year bond yield to the highest level since April 2011, albeit does little to provide any meaningful boost to the JPY.

• 　　Japans Finance Minister Shunichi Suzuki reiterated that he is closely monitoring FX fluctuations and that he will prepare to take full steps on the currency, though declined to comment on details of the policy. Signs over the last few hours of attempts to prop up the Yen appear to have failed with USD/JPY returning to its session highs.

　　Technical Analysis: USD/JPY needs to pause and consolidate before the next leg up amid extremely overbought RSI

　　From a technical perspective, momentum beyond the 156.00 mark could be seen as a fresh trigger for bullish traders and supports prospects for additional gains. That said, the extremely overbought Relative Strength Index (RSI) on the daily chart makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for the next leg of a positive move.

　　Meanwhile, any corrective decline below the 156.00 mark now seems to find decent support near the 155.35-155.30 region. This is followed by the 155.00 psychological mark and a short-term trading range resistance breakpoint, around the 154.70 area. A break below the latter has the potential to drag the USD/JPY pair to the 154.00 round figure en route to last Fridays swing low, around the 153.60-153.55 zone.

　　Mga FAQ ng Japanese Yen

　　Ang Japanese Yen (JPY) ay isa sa mga pinakanakalakal na pera sa mundo. Ang halaga nito ay malawak na tinutukoy ng pagganap ng ekonomiya ng Japan, ngunit mas partikular ng patakaran ng Bank of Japan, ang pagkakaiba sa pagitan ng mga yield ng bono ng Japan at US, o sentiment ng panganib sa mga mangangalakal, bukod sa iba pang mga kadahilanan.

　　Ang isa sa mga mandato ng Bank of Japan ay ang currency control, kaya ang mga galaw nito ay susi para sa Yen. Ang BoJ ay direktang namagitan sa mga pamilihan ng pera kung minsan, sa pangkalahatan ay upang babaan ang halaga ng Yen, bagama't pinipigilan nitong gawin ito nang madalas dahil sa mga pampulitikang alalahanin ng mga pangunahing kasosyo nito sa kalakalan. Ang kasalukuyang BoJ ultra-loose monetary policy, batay sa napakalaking stimulus sa ekonomiya, ay naging sanhi ng pag-depreciate ng Yen laban sa mga pangunahing currency na kapantay nito. Ang prosesong ito ay lumala nang mas kamakailan dahil sa tumataas na pagkakaiba-iba ng patakaran sa pagitan ng Bank of Japan at iba pang mga pangunahing sentral na bangko, na nagpasyang pataasin nang husto ang mga rate ng interes upang labanan ang mataas na antas ng inflation sa mga dekada.

　　Ang paninindigan ng BoJ na manatili sa napakaluwag na patakaran sa pananalapi ay humantong sa isang lumalawak na pagkakaiba-iba ng patakaran sa iba pang mga sentral na bangko, lalo na sa US Federal Reserve. Sinusuportahan nito ang pagpapalawak ng pagkakaiba sa pagitan ng 10-taong US at Japanese bond, na pinapaboran ang US Dollar laban sa Japanese Yen.

　　Ang Japanese Yen ay madalas na nakikita bilang isang safe-haven investment. Nangangahulugan ito na sa panahon ng stress sa merkado, ang mga mamumuhunan ay mas malamang na ilagay ang kanilang pera sa Japanese currency dahil sa dapat na pagiging maaasahan at katatagan nito. Ang mga magulong panahon ay malamang na magpapalakas sa halaga ng Yen kumpara sa iba pang mga pera na nakikitang mas peligrosong mamuhunan.