Australia Exchange Foreign Exchange Today's news, the Bank of Japan maintained interest rates unchanged, YCC ultra-loose and stable, and the United States and Japan rose nearly 50 points in the short term

In early Asian trading, the dollar/yen rose nearly 50 points to 148.16, before falling slightly back to 148.06. The Bank of Japan decided to maintain the -0.1% interest rate unchanged, the board of directors decided unanimously, and the yield curve control (YCC) policy was stable. Japanese Finance Minister Shunichi Suzuki intervened verbally as usual, saying that he would pay close attention to foreign exchange trends.

The BoJ statement said: "Maintaining the target for the 10-year JGB yield at 0.5 per cent up or down, officials have made a consistent decision on YCC policy and have not changed forward guidance."

"The Bank of Japan maintained its offer to buy 10-year JGBs at 1.0 per cent a day through fixed-rate market operations."

The statement said that the Japanese economy is recovering moderately, and this trend is likely to continue. Inflation expectations are showing signs of accelerating again, and it is necessary to pay attention to financial andforeign exchange marketTrends and their impact on Japanese economic activity and prices.

The Bank of Japan kept its monetary policy unchanged and provided no clear sign of a shift in its policy stance, dampening market speculation about the prospect of a near-term rate hike and keeping the yen under pressure. The BoJ also continued to promise to increase stimulus without hesitation if necessary, providing a reason for yen bears to remain short. The yen weakened after the decision was announced. There were no major changes to the BoJ's policy statement, suggesting that Governor Kazuo Ueda may adopt a neutral tone in his press conference to preserve options while trying to avoid further downward pressure on the currency.

Suzuki Shunichi said that he will closely monitor the trend of foreign exchange with a high sense of urgency and does not rule out the possibility of any response to excessive foreign exchange fluctuations.

He mentioned that Japan will maintain close contact with overseas monetary authorities, will take appropriate measures to deal with rapid foreign exchange fluctuations, and must continue to advance fiscal reform.

"Both the US and Japan agree that excessive exchange rate volatility is not desirable," he stressed.

Japan's inflation data for August caught investors' interest, with annual core inflation holding steady at 3.1% and annual inflation softening to 3.2% from 3.3%.

Japan's Ministry of Internal Affairs and Communications released economic data on Thursday that soaring food prices and rising gasoline prices pushed Japan's consumer price index (CPI) excluding fresh food to 105.7 in August, up 3.1% from the same month in 2022, rising for the 24th consecutive month and above the 2% target set by the Japanese government and central bank for the 17th consecutive month. However, CPI growth was the same as 3.1% in the previous July, and it did not expand for the second consecutive month.

Activity in the US private sector will be in the spotlight later on Friday as a pick-up in service sector activity, following higher-than-expected initial jobless claims, will give further impetus to the Federal Reserve's interest rate rise in November.

Economists predict that the S & P Global Services Purchasing Managers Index (PMI) will rise from 50.5 to 50.6. It is worth noting that the US services sector contributes more than 75% of US GDP. The upward trend in service sector activity will drive demand-driven inflation. Rising US interest rates will dampen spending, affecting service sector activity and demand-driven inflationary pressures.

USD/JPY price movement

FXEmpire analyst Bob Mason said that looking at the daily chart, the USD/JPY remains above the 50-day and 200-day moving averages, confirming a bullish price signal. However, the hawkish Bank of Japan will support the USD/JPY to fall below the 146.649 support, and a fall below the 146.649 support will see the 50-day moving average.

A stronger-than-expected US services PMI would support a break above the resistance level of 148.405 for the USD/JPY. While a break above the 150 resistance level would be possible, speculation about Japanese government intervention should limit upside potential.

On the 14th, the RSI of 57.99 supported the USD/JPY break through the resistance level of 148.405 and then enter the overbought area.

()

On the 4-hour chart, USD/JPY hovers above the 50-day and 200-day moving averages, reiterating a bullish price signal. Avoiding a fall below the 50-day moving averages will support a break through resistance at 148.405. A break through resistance will keep bulls focused on 150 points.

However, a break below the 50-day moving average would allow support below 147 and 146.649 to come into play.

The 14-4 hour RSI reading is 46.59, which supports the USD/JPY to return below 147 before entering the oversold zone.