Japanese yen tiptoes at 145 line

USD/JPY has edged higher at the start of the week, trading at 145.10 in the European session.

Tokyo Core CPI next

Japan’s Tankan indices for Q3 were mixed and the yen had a muted response. Manufacturing dropped to 8, down from 11 in Q1 and missing the consensus of 11 points. Services ticked higher to 14, up from 13 and just above the forecast of 13 points. Later in the day, Japan releases a key inflation gauge, Tokyo Core CPI. The index is expected to rise to 2.8% in August, up from 2.4% in July.

Inflation in Japan has risen to 3%, much lower than other major economies but a huge change after years of deflation. The Bank of Japan has been keeping an eye on inflation, but Governor Kuroda has said he will not change the Bank’s ultra-loose policy until wages rise and it’s clear that inflation is not transient. Sound familiar? Fed Chair Powell and ECB President Lagarde dismissed high inflation as transient but were forced to tighten policy as inflation never let up.

The BoJ has been very firm with its yield curve control, keeping JGB yields at low levels. With US Treasury yields moving higher, the US/Japan rate differential has widened, and the yen has fallen sharply. The Ministry of Finance (MOF) stepped in with an intervention in September, after the yen hit 145.90. The dramatic move sent the yen higher, but only for a few days. USD/JPY has been trading close to the 145 line and has pushed just above it today. With the US dollar continuing to rally, it seems likely that the yen will continue to lose ground. It will be interesting to see if the Ministry of Finance intervenes again to prop up the yen. If it does, we can expect some volatility from the Japanese yen.


USD/JPY Technical

  • There is resistance at 144.81 and 146.06
  • USD/JPY has support at 143.21 and 141.88

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 info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)