- The Japanese yen was drifting to a decrease against the dollar for the third day in a row on Monday.
- Japanese PMis seems to be the weakest and positive risk tone weighing on the armed JPY.
- BOJ’s varying policy expectations can be determined any other gains against the US dollar/JPY.
The Japanese yen (JPY) remains depressed during the Asian session on the back of printing the weakest purchasing directors in Japan (PMI), which was released earlier on Monday. Meanwhile, reports indicating that the mutual definitions of US President Donald Trump will be narrower and less strict than it was in the beginning, which turned out to be another worker who undermines the safe JPY. The US dollar (USD), on the other hand, is committed to the gains of recovery last week from the lowest level in a few months and raising the dollar pair/JPY to nearly 150.00 psychological brand.
However, the expectations that strong wage growth can nominate in wider inflation directions and give the head (BOJ) head to keep interest rates from JPY bears of aggressive stakes. On the other hand, investors were advancing at the possibility that the Federal Reserve (Fed) would soon be resumed its price cutting course amid concerns about the slowdown in the tariff tariff. This, in turn, may gain gains for the US dollar and support the low JPY, which requires caution before locating it for further move to the dollar pair/JPY.
The Japanese bulls remain the bulls on the margin, amid a set of negative factors
- According to the initial estimates issued earlier this Monday, the project managers index fell in the manufacture of AU Jibun Bank from 49.0 in the previous month to 48.3 in March 2025. This represents the lowest reading since March 2024 and the ninth month in a row.
- In addition, the services sector, which was a bright point in the Japanese economy, lost momentum and contracted for the first time in five months. Moreover, the overall outlook has decreased to the lowest level since August 2020, which is seen as weighing the Japanese yen.
- Reports indicated during the weekend that Trump is planning a narrower and more targeted business schedule of the so -called mutual definitions that are scheduled to enter into force on April 2. This fuel hopes to obtain a less definition Trump’s tariff, which enhances investor confidence, which increases the undermining of safe JPY.
- The results of the annual employment negotiations in the spring in Japan revealed that companies have agreed to unions with a strong wage growth for the third year in a row. Moreover, inflation in Japan is still 2 % higher than the central bank’s goal and keeps the door open for more prices by the Bank of Japan.
- Moreover, Boj Kazuo Ueda said last week that the central bank wanted to conduct policies before it is too late. UEDA added that achieving the goal of inflation by 2 % is important for the long -term credibility, and BOJ will continue to control the degree of mitigation if expectations are achieved.
- The Deputy Governor of Boj Shinichi Uchida said that the central bank will adjust the degree of cash dilution by raising policy prices if economic expectations and expectations are achieved. He added that BOJ will continue to evaluate the economic and financial market cases at home and abroad.
- Meanwhile, the Federal Reserve gave a higher stumbling block to drop inflation, although its expectations were maintained to reduce 25 basis points at the end of this year. This maintains a cover for the recent recovery of the US dollar from the lowest multi -month level and must determine the ups of the dollar pair/JPY.
- Traders are now looking for the Flash USA PMIS version, which, along with the speeches conducted by influential FOMC members, can provide some motivation. However, the focus will be on the issuance of the CPI price index in Tokyo and the PC PE PCE on Friday.
The US dollar/JPY can extend the move up once SMA wiped 200 liters on H4
From the technical perspective, the pair of the dollar/JPY needs to separate over the simple moving average 200 (SMA) on the graph for 4 hours-a little higher than the Psychological brand 150.00-bonth to control the short term. Given that the oscillator on the daily chart has just begun to obtain a positive preposition, the subsequent action may lead to the immediate prices to the mark of 151.00 on its way to the monthly peak, about 151.30 regions.
On the other hand, the decrease in the Asian session may protect, all over the 149.30 region, the direct downside before 149.00 marks. This follows the support of 148.60-148.55, which if the broken decisively can make the dollar pair/JPY vulnerable to accelerate the fall towards the swing last week, at about 148.28-148.15 on the way to the 148.00 mark, and oral support 147.75. Some of the sale can pave the way to the slide towards the 147.30 area before the immediate prices eventually decrease to the 147.00 mark and the 146.55-146.50 region, or the lowest level since October earlier this month.
Japanese questions yen
The Japanese yen (JPY) is one of the most trading currencies in the world. Its value is widely determined by the performance of the Japanese economy, but more specifically through the policy of the Bank of Japan, and the differential between the revenues of Japanese and American bonds, or risk morale among merchants, among other factors.
One of the states of the Bank of Japan is the control of the currency, so its movements are the key to the yen. BOJ interfered directly in the currency markets sometimes, and generally to reduce the value of the yen, although it refrains from doing so often due to the political concerns of its main commercial partners. Boj Ultra-LOOSE’s monetary policy between 2013 and 2024 caused the yen to decrease against its main peers due to the difference in policy between the Bank of Japan and other major central banks. Recently, relaxation has gradually gave this super -support policy some support for the yen.
Over the past decade, the BoJ’s position of adhering to a high -minded monetary policy has has expanded a difference in politics with other central banks, especially with the American Federal Reserve. This is to support the expansion of the difference between American and Japanese bonds for a period of 10 years, which preferred the US dollar against the Japanese yen. BOJ’s decision in 2024 to gradually abandon the policy of the super taste, as well as discounts in the interest rate in other major central banks, narrows this difference.
The Japanese yen is often seen as a safe investment. This means that in times of stress on the market, investors are likely to put their money in the Japanese currency because of its reliability and supposed stability. Distinguished times are likely to enhance the value of the yen against other currencies that are seen as more dangerous for investment.
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