Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Dollar Pushes Yen Above 114

By MarketPulse (Kenny Fisher)ForexJan 25, 2022 12:18PM ET
www.investing.com/analysis/dollar-pushes-yen-above-114-200615900
U.S. Dollar Pushes Yen Above 114
By MarketPulse (Kenny Fisher)   |  Jan 25, 2022 12:18PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

After years of deflation, Japanese inflation indicators continue to point upwards. The latest gauge to confirm the upswing was BoJ core inflation for December, which rose from 0.8% to 0.9% y/y, above the consensus of 0.7%. Later today, the Services Producer Price Index is expected in at 1.0%. Producer inflation has been running at a faster clip than consumer inflation, as businesses have been reluctant to pass on higher costs to consumers.

The weak yen has widely been blamed as being a key factor in higher inflation, but BoJ Governor Haruhiko Kuroda had a different take earlier today, saying that the surge in global commodities was a much bigger factor in boosting Japan’s inflation than the yen. Kuroda stated that he would not consider the yen as being “abnormally” weak and causing higher inflation. This would seem to indicate that the BoJ is not concerned, at least for now, with the depreciation of the yen, with the USD/JPY rising 3.6% since September 1st. The BoJ would not lose any sleep if the yen continued to lose ground, as this would likely lead to higher inflation.

The uptrend in inflation is a new development in Japan, but the bank is unlikely to shift away from its ultra-accommodative policy or raise rates anytime soon. Governor Kuroda has said that a rise in inflation that does not include higher wage growth is not sustainable, which sounds very much like the ‘transient inflation’ phrase that Fed Chair Jerome Powell was using until recently.

Investors are anxiously awaiting the FOMC meeting on Wednesday, with the Fed poised to raise rates in March after a 3-year hiatus. There has also been some speculation that the Fed might depart from incremental hikes of 0.25% and announce a dramatic 0.50% move. This would provide a ‘double punch’ of curbing inflation and sending the markets a strong message in order to restore credibility, which has taken a hit from some market participants that feel that the Fed has been too slow in its response to surging inflation.

USD/JPY Technical

  • There is resistance at 114.64 followed by 115.57
  • There is support at 113.19 and 112.67

USD/JPY Daily Chart
USD/JPY Daily Chart

U.S. Dollar Pushes Yen Above 114
 

Related Articles

Carl Paraskevas
USD/JPY: Price Rally Stalls By Carl Paraskevas - May 16, 2022

After a parabolic rise, USD/JPY registered its first weekly loss on Friday, providing traders the first opportunity to question whether this marks the end to the yen’s misfortune...

U.S. Dollar Pushes Yen Above 114

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Shane Zhang
Shane Zhang Jan 25, 2022 5:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
USDJPY has not able to follow Nikkie for the past few years due to money printing
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email