Japanese Yen weakens against US Dollar amid hawkish FOMC minutes

The Japanese Yen weakened against the US Dollar on Thursday, with the USD/JPY pair gaining 0.12% to trade around 158.20 in the European session. This rise in value reflects the broader strength of the US Dollar. In the past week, the US Dollar emerged as the strongest currency against major counterparts, including the Swiss Franc.

A heat map indicates percentage changes of major currencies against each other, with the US Dollar Index (DXY) marginally higher at near 102.30, close to its annual peak of 102.54. The Fed's expectation of another interest rate hike this year has led to the US Dollar's firmness. FOMC minutes from the September policy meeting highlighted the need for at least one more interest rate hike, citing AI buildout and stronger economic outlook as factors.

Analysts from Societe Generale also noted that FOMC minutes reaffirmed the tilt towards another rate increase. In Tokyo, Japan's Current Account data for August showed a stronger-than-expected surplus of 4,062 billion Yen, surpassing the estimated 3,194 billion Yen and the previous release of 2,988 billion Yen. The USD/JPY pair trades at 158.22 and holds a bullish near-term bias, advancing above the 20-day exponential moving average (157.55).

The RSI at 55.36 suggests constructive buying pressure. Support is located at the 20-day EMA at 157.55, where a close below this level could signal fading upside momentum and a deeper corrective phase. Technical analysis, aided by AI, notes that price action in USD/JPY is likely to remain driven by momentum and broader market factors while holding above the 157.55 support area.