Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
CATEGORIES
News
- 【XM Group】--GBP/CHF Forecast: GBP Weakens vs CHF
- 【XM Forex】--USD/BRL Analysis: Lower Depths Explored as Crucial Questions Remain
- 【XM Forex】--EUR/USD Forecast: Euro Continues to Grind Back and Forth
- 【XM Market Analysis】--GBP/USD Forex Signal: Double Bottom Points to a Rebound
- 【XM Decision Analysis】--USD/JPY Forex Signal: US Dollar Pulls Back Against the L
market analysis
The US data exceeded expectations, but the US dollar plunged against the Japanese yen? Bank of Japan's interest rate hikes may accelerate?
Wonderful introduction:
Without the depth of the blue sky, there can be the elegance of white clouds; without the magnificence of the sea, there can be the elegance of the stream; without the fragrance of the wilderness, there can be the emerald green of the grass. There is no seat for bystanders in life, we can always find our own position, our own light source, and our own voice.
Hello everyone, today XM Forex will bring you "[XM Forex]: US data exceeds expectations, but the US dollar dives against the yen? The Bank of Japan's interest rate hikes may accelerate?" Hope it will be helpful to you! The original content is as follows:
On Friday (September 26), the US dollar fell 0.13% against the yen, and the US PCE data exceeded expectations, instead suppressing the US dollar trend. Currently trading around 149.46, we look for clues through the following. Looking back at today's trend, in the early trading session of the Asian market, Japan's Tokyo CPI, which was unsatisfactory to expectations, was released, and the exchange rate fell by nearly 30 points from 149.93 to 149.65.
Japan Tokyo CPI data for September showed that Japan's core inflation in September was lower than the expected 2.8 and reached the level of 2.5, but analysis said that this result was affected by non-recurring factors, and the data itself is still far higher than the central bank's target of 2%. Price pressure has made the market's expectations of recent interest rate hikes continue. In the New York period, with the release of the US PCE data beyond expectations, the US dollar fell by 40 points against the Japanese yen. The following is an analysis of these phenomena.
Non-recurring factors may be the main reason for the decline in CPI data in Tokyo, Japan
This data will become one of the information that the Bank of Japan focuses on at its policy meeting from October 29 to 30, when the central bank's board of directors will release the latest quarterly growth and price expectations, which will become key factors in its interest rate decisions.
Specifically, excluding the Tokyo Core Consumer Price Index (CPI), which includes volatile fresh foods but includes fuel costs, rose 2.5% year-on-year in September, lower than the market's generally expected 2.8% increase.
As the leading indicator of national inflation trends, Tokyo's core CPI also rose by 2.5% year-on-year in August.
Data shows that inflation in September is less than expected, the main reason is that the Tokyo Metropolitan Government has taken a series of measures to alleviate the pressure on rising cost of living, such as lowering childcare fees and water fees.
Although there are non-recurring factors, Japan's inflation is actually slowing down
It is worth noting that Japan's Tokyo CPI is an index that eliminates the cost of fresh food and fuels that has a large fluctuation. It is also the Bank of Japan closely monitors the index and regards it as a better indicator to measure potential inflation. It rose 2.5% year-on-year in September and the index rose 3.0% in August.
Food inflation after excluding the costs of fresh foods such as vegetables slowed to 6.9% in September from 7.4% in August.
Koya Miyamae, senior economist at SMBC Nikko Securities, said: "After removing the one-time factor, the overall trend of slowing food inflation has not changed." But the author believes that the inflation data itself is still far from meeting the Bank of Japan's target.
Inflation data is conducive to the Bank of Japan keeping interest rates unchanged
Ko Miyamae also expects the Bank of Japan to raise interest rates in December or January next year. He pointed out: "When deciding on the timing of interest rate hikes, the Bank of Japan should not only pay attention to price trends, but also consider the impact of exports, corporate profits and the economy."
The Bank of Japan ended its ten-year large-scale stimulus plan last year and raised its short-term interest rate to 0.5% in January this year, when the central bank believed that Japan was close to continuing to achieve its 2% inflation target.
But the data show that the inflation problem is still not resolved.
Although Japan's national core inflation has remained above 2% for more than three consecutive years, Bank of Japan Governor Kazuo Ueda stressed that further rate hikes need to be cautious to ensure that price increases are driven by wage growth and strong domestic demand.
The Bank of Japan kept interest rates unchanged last week. But there are signs that the central bank's board of directors has risen internally on the growing pressure on price pressures - two members raised objections to propose raising interest rates to 0.75%, but the proposal was not approved.
The US dollar index has risen rapidly recently may pose hidden dangers
Affected by the recent exceeding expectations of the United States' GDP and consumer spending, xn--xm-6d1dw86k.combined with the recent hawkish voice of Federal Reserve Chairman Powell, the US dollar index has risen rapidly recently. The rise in the US dollar index has also caused CME's interest rate futures to show that the probability of the Federal Reserve's interest rate cut in October has been declining.
The US PCE price index released on Friday was 2.7, exceeding the market expectations of 2.6, but the US dollar index did not rise because of this. On the one hand, the core PCE data excluding high volatility terms was 2.9 in line with expectations. On the other hand, the US dollar index may have priced in advance, resulting in excessive inflation.
Or more directly, the market can continue to bet on the Fed's rate cut path just by not continuing to deteriorate, as the data on the job market shown by non-agricultural job market is too weak.
It is worth noting that the Bank of Japan will announce it next TuesdaySummary of the opinions of members of the review xn--xm-6d1dw86k.committee in September, Japan's Liberal Democratic Party presidential election was officially held next Saturday. In line with the inflation data of the United States and Japan in line with the monetary policy direction of their respective central banks, the breakthrough of the US dollar against the Japanese yen may evolve into a false breakthrough that lures more.
Technical analysis:
Previous article repeatedly mentioned that once the US dollar and the Japanese yen rise by 149.04, it is considered to be the end of the short selling of the US dollar and the Japanese yen currency pair, and will start the development of the bulls. The support level is the middle track of the rising channel. You can use the strategy of buying online back line to operate, and support it in the fan-shaped area where the middle track intersects 149.04. The current resistance is at the 150.50 mark, that is, near the previous high. The MACD red column opening rate is slow, indicating that the US dollar rises against the Japanese yen is too hasty, and the exchange rate may need to fall back to the middle track of the upward channel in the short term.
But xn--xm-6d1dw86k.combined with fundamentals, traders need to be wary of whether there will be a false breakthrough between the US dollar and the Japanese yen.
The above content is all about "[XM Forex]: The US data exceeded expectations, but the US dollar dived against the yen? The Bank of Japan raised interest rates or accelerated?" It was carefully xn--xm-6d1dw86k.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
Life in the present, don’t waste your current life in missing the past or looking forward to the future.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here