Japanese Yen remains pinned near multi-decade low against USD
==========
The Japanese Yen remains near a multi-decade low against the USD. The uncertainty over the Bank of Japan's (BoJ) further policy tightening and easing fears about a further escalation of geopolitical tensions in the Middle East are key factors undermining the JPY. The BoJ Governor Kazuo Ueda's hawkish rhetoric and warnings by Japanese Finance Minister Shunichi Suzuki against excessive currency market moves help limit deeper JPY losses. Traders are reluctant to place fresh bets ahead of the crucial policy decision on Friday. Reduced Fed rate cut bets act as a tailwind for the USD and lend support to USD/JPY. Data released on Friday showed that Japan's consumer inflation eased more than expected in March, raising uncertainty about whether the Bank of Japan will raise rates again and weighing on the Japanese Yen. Iran's lack of plans to retaliate against the Israeli missile strike helps improve investors' appetite for riskier assets and further dents the JPY's safe-haven status. Fed funds futures suggest that the Federal Reserve is now anticipated to cut interest rates by roughly 40 basis points (bps), or less than two cuts this year starting September. The large rate differential between the US and Japan is expected to stay, acting as a headwind for the JPY and lending support to the USD/JPY pair. The focus will remain on the quarterly outlook report in the upcoming BoJ monetary policy decision. Important US macro data, including the Advance Q1 GDP and the Personal Consumption Expenditures (PCE) Price Index, will be released this week and influence the US Dollar price dynamics. From a technical perspective, the USD/JPY pair is consolidating near a multi-decade high, with slightly overbought RSI, suggesting bullish potential. The range-bound price action might still be categorized as a bullish consolidation phase, and any meaningful corrective pullback might be seen as a buying opportunity. The multi-decade high around the 154.75-154.80 region could act as an immediate hurdle, and a sustained strength beyond the 155.00 psychological mark will confirm a fresh breakout through the short-term trading range.
#JapaneseYen #Usd #BankOfJapan #FederalReserve #InterestRates