Japanese Yen Outlook: USD/JPY, EUR/JPY & GBP/JPY

USD/JPY 1H Chart

EUR/JPY: 1H Chart

GBP/JPY: 1H Chart

Japanese Yen Outlook: USD/JPY, EUR/JPY & GBP/JPY

 Key Support Levels:

- USD/JPY: 160.266

- EUR/JPY: 173.937

- GBP/JPY: 206.104

 Key Resistance Levels:

- USD/JPY: 161.893

- EUR/JPY: 174.780

- GBP/JPY: 206.680

The Japanese yen has been under significant pressure, weakening further due to a series of economic and policy developments. The USD/JPY pair has been fluctuating around the 161 level, with market participants closely watching the resistance at 162. This movement is largely influenced by cautious remarks from Federal Reserve Chairman Jerome Powell, who reiterated the Fed's data-dependent approach. Powell's testimony highlighted concerns about inflation and the potential impact of high borrowing costs on the labor market, causing market participants to reassess their expectations for future rate cuts. Consequently, the odds of a September rate cut have slightly decreased, reflecting increased uncertainty.

Adding to the yen's woes, Japan's Producer Price Index (PPI) for June came in lower than expected, registering a monthly increase of 0.2% against the anticipated 0.4%. This modest rise, coupled with a year-on-year figure of 2.9%, suggests persistent deflationary pressures, further undermining the yen. The Japanese central bank's continued ultra-loose monetary policy, contrasted with the Fed's hawkish stance, has widened the interest rate differential, making the yen less attractive.

The market sentiment remains bullish for USD/JPY, bolstered by strong US economic indicators and the Fed's stance. The upcoming US CPI data is expected to play a crucial role in determining the next moves in the USD/JPY pair. Analysts predict that a higher-than-expected CPI could lead to a stronger dollar, pushing USD/JPY higher. Conversely, a lower figure could provide some relief for the yen.

Key influences include Federal Reserve signals, US economic data, and Japan's PPI. Potential movement for USD/JPY could see it testing the resistance at 162, driven by these economic indicators and policy developments. The broader implications for EUR/JPY and GBP/JPY also suggest continued pressure on the yen, influenced by regional economic conditions and central bank policies.

Economic Calendar (GMT+8):

• Core CPI (Jun) - July 11, 20:30:Measures changes in prices excluding food and energy. Higher-than-expected CPI could strengthen USD.

• PPI (MoM) (Jun) - July 12, 20:30:Measures the average change in selling prices received by domestic producers. Higher-than-expected PPI could strengthen USD.

• Michigan Consumer Sentiment (Jul) - July 12, 22:00:Measures consumer confidence. Higher-than-expected sentiment could strengthen USD.

Key Influences:

• Federal Reserve Signals:Powell's cautious comments impact market sentiment.

• US Economic Data:CPI and PPI data will be crucial for USD/JPY movement.

• Japan's PPI:Lower-than-expected figures add pressure on the yen.

Potential Movement:

• USD/JPY:Likely to test resistance at 162, driven by US economic data and Fed policies.

• EUR/JPY & GBP/JPY:Influenced by broader yen weakness and respective regional economic indicators.

Overall Sentiment:

Bullish on USD/JPY due to strong US economic indicators and Fed's cautious approach.