Analysis of the trend of the dollar against the yen, Ava Forex takes you to see the impact of the data

On Friday (November 7), the dollar rallied slightly against the yen in the Asian session. It is currently trading around 153.40, rising by about 0.23%, partially recovering the previous trading day's decline. The recent release of Japanese household spending data did not meet expectations. Weak consumer spending may suppress demand-driven inflation, which provides room for the Bank of Japan to delay further interest rate hikes in the context of the support of economic stimulus by the new Prime Minister Takaichi Sanae, which may form a certain selling pressure on the yen.

Meanwhile, the Bank of Japan's September policy meeting notes that a near-term interest rate hike remains a possibility, and expectations that the Japanese authorities may intervene in the market to contain further depreciation of the currency may limit the bearish sentiment towards the yen to some extent.

On the other hand, the dollar is in a relatively defensive position due to market concerns that a prolonged US government shutdown could weigh on economic performance. This factor could limit the dollar's significant upside against the yen. When making relevant trading decisions, investors can refer toAva ForexThe market analysis information provided.

The yen weakened slightly, weak Japanese data increased central bank policy uncertainty, and fiscal concerns persisted

Household spending in Japan rose just 1.8 per cent year-on-year in September, according to data released early on Friday, below market expectations of 2.5 per cent and 2.3 per cent. The seasonally adjusted month-on-month data fell 0.7 per cent, indicating signs of cooling in the private consumption sector.

Japan's new prime minister, Sanae Takaichi, is reportedly mulling an economic stimulus package of about $65 billion aimed at tackling inflation and growth, and plans to fund it through a supplementary budget in late November. At the same time, the Bank of Japan remains cautious about further interest rate hikes.

The Bank of Japan's September policy meeting notes that policymakers will maintain a cautious pace of interest rate hikes after weighing inflation dynamics against trade risks. However, committee members noted that with the Bank of Japan's 2% price stability target largely achieved, the central bank is likely to return to interest rate hikes in the future.

Jun Mimura, Japan's deputy finance minister for international affairs and top foreign exchange official, said on Wednesday that the yen had moved away from fundamentals recently, adding that long positions in the yen were continuing to shrink amid market speculation about Japan's macroeconomic policies, particularly fiscal policy.

Dollar bulls have been on the sidelines as the dollar unwinds from the previous day's losses and markets remain wary of the economic risks posed by a prolonged US shutdown. The standoff shows no sign of easing after Democrats said they were prepared to block Republicans' plans to force a vote on Friday.

After hawkish comments from a range of influential FOMC members, market expectations for further easing by the Federal Reserve have been downgraded. The current forecast for a rate cut in December is about 69%, which to some extent limits the decline of the dollar and may attract some low buying for the dollar against the yen.

Traders are keeping a close eye on preliminary data from the University of Michigan's US Consumer Sentiment Index as the longest government shutdown in US history halts official data releases. This data, along with comments from Federal Reserve officials, affects the dollar and could lead to short-term trading opportunities ahead of the weekend. For an in-depth look at market volatility, follow AvaForex PlatformThe relevant interpretation.

The dollar was repeatedly blocked against the yen at around 154.45, and the trend showed weakness

The US dollar has recently encountered resistance near 154.45, and it fell below the support area of 153.30-153 overnight, providing a basis for further weakening of the exchange rate.

On the downside, any further decline is likely to find some support around the 152.15-152 area. A sustained drop below the 152.00 mark would be seen as a new bearish signal and could pave the way for a continuation of the correction from the high since February (154.48).

On the upside, the pair may face resistance around 153.65. If it can continue to break through this resistance level, the USD/JPY is expected to return to above the 154.00 mark and further test the key pivot point of 154.45. If it breaks through effectively, the pair may rise towards the psychological level of 155.00, and then challenge the resistance zone of 155.60-155 and the whole number of 156.00.

(Daily chart of USD/JPY)

At 14:11 Beijing time, the dollar traded against the yen near the 153.38/39.