Event to watch out for today:
15:30 EET. USD – Unemployment Claims Number
USDJPY:
Uncertainty over the likely timing of the Bank of Japan’s next rate hike could put pressure on the yen.
The Japanese yen (JPY) is rising against its U.S. counterpart after government data showed on Thursday that Japan’s base wage rose at the fastest pace in more than three decades. This came amid talk that large Japanese companies are likely to increase wages by an average of 5% in 2025, which, along with rising inflationary pressures, bolsters the case for another interest rate hike by the Bank of Japan (BoJ). In addition, cautious market sentiment is supporting the safe-haven yen and pulling the USD/JPY pair away from the multi-month peak near 158.55 reached on Wednesday.
Investors, however, remain skeptical about the likely timing of the Bank of Japan’s next interest rate hike and expect the central bank to wait until this year’s spring labor talks in Shunto. In addition, the recent widening rate differential between the U.S. and Japan, bolstered by the Federal Reserve’s (Fed) hawkish signal that it will slow the pace of rate cuts in 2025, could help push yen yields lower. Traders may also prefer to take a wait-and-see stance ahead of speeches by a number of influential FOMC members this Thursday and the US Non-Farm Payrolls (NFP) report on Friday.
Trading recommendation: Watch the level of 158.00, if the level is fixed below consider Sell positions, if the level bounces back consider Buy positions.
Origin: FreshForex
