Japanese Yen recovers from two-week low on fast BoJ rate hike bets, softer USD
The USD/JPY pair sticks to modest intraday losses through the first half of the European session on Friday, though it manages to hold above the 159.00 mark and remains close to a two-week top set the previous day.
The Japanese Yen (JPY) experienced a brief recovery from a two-week low as traders anticipated a faster-than-expected interest rate hike from the Bank of Japan (BoJ) in September. Meanwhile, the US Dollar (USD) faced pressure due to declining US inflation, which allowed the Federal Reserve (Fed) to hold interest rates steady. This led to some selling of the USD/JPY pair.
However, the USD was still relatively supported as traders remained cautious about the Fed's potential rate hikes by the end of the year. Geopolitical tensions between the US and Iran might also act as a positive factor for the USD, a safe-haven currency. Additionally, Japan's interest rates remained significantly lower than those of other major economies, which could further support the JPY through the carry trade.
Nonetheless, traders are advised to wait for further selling before confirming the recent sharp recovery of the USD/JPY pair. The pair remains closely monitored as traders await fresh impetus from US macro data. The 50.0% Fibonacci retracement level at 159.61 may act as a challenging level for the USD/JPY pair, while a break above it could lead to a move towards the 160.32–160.65 zone, where significant support is found.
On the downside, support can be found at the 38.2% retracement level at 158.58 and the 23.6% level at 157.30, with a deeper support at the 155.22 anchor low if selling pressure increases.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
