- BoJ hints at monetary policy shift
- Japanese yen soars over 2%
- US releases nonfarm payrolls on Friday
The Japanese yen has surged on Thursday. In the North American session, USD/JPY is trading at 144.00, down a massive 2.25%. Earlier, the yen dropped as low as 143.79 per dollar, which marked the yen’s highest level since August 10.
Will BoJ make a move at the December meeting?
The yen has posted its biggest one-day jump of the year against the dollar on Thursday after Bank of Japan policy makers provided clear hints that the central bank is planning a major shift in monetary policy. Governor Kazuo Ueda said earlier on Thursday that the BoJ would face an “even more challenging” situation at the end of the year and in early 2024 regarding monetary policy guidance and said the BoJ would have to decide which interest rates to target once it ends negative rates.
Ueda’s hint that negative rates might soon end followed comments from BoJ Deputy Governor Ryozo Himino on Wednesday. Himino discussed the potential consequences if the BoJ were to raise rates into positive territory.
The BoJ is generally tight-lipped about its plans, and these comments from senior BoJ officials were unusual. The markets have interpreted the remarks as signals about a potential shift in policy, which has sent the yen soaring on Thursday. The BoJ meets next on December 18-19, and the comments from Ueda and Himino have turned the meeting “live”, as the markets will be watching for a change in policy at the meeting. At previous meetings, tweaks in policy have sent the yen sharply higher and even speculation of a move can send the yen soaring, as evident today.
The US releases nonfarm payrolls, one of the most important economic releases, on Friday. The ADP employment report isn’t considered an accurate indication of job growth but is still closely watched, as it is released just two days prior to the nonfarm payrolls report.
ADP didn’t show much change in November, dropping to 103,000 compared to a downwardly revised 106,000 in October. However, this was well below the consensus estimate of 130,000. Nonfarm payrolls are expected to rise to 180,000, after an October gain of 150,000. If the nonfarm payrolls report misses the estimate, the US dollar will likely lose ground in Friday’s North American session.
- USD/JPY has breached support levels at 145.96 and 144.70. The next support level is at 143.69, followed by 142.73
- There is resistance at 148.93 and 150.74
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at email@example.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.