• The Fed’s hawkish projections for rates continues to widen the US-Japan yield differential, further underpinning the continued support for USDJPY. As noted yesterday following the CPI data, dips continue to be both well supported and technically corrective.
  • The immediate focus is on 140.45, the June 05 high, however attention is on key resistance at the top of a bull channel drawn from the Jan 16 low. The line intersects at 141.35 today and a clear break of this hurdle would reinforce a bullish theme and open 142.25, the Nov 21 2022 high.
  • Worth noting that the Bank of Japan meeting/decision is this Friday. On Tuesday, MNI reported that there is no prospect that the Bank of Japan will scrap yield curve control this year, because even if policymakers become confident of a virtuous cycle between wage hikes and price rises they would still want to avoid any sharp rise in interest rates, MNI understands.

JPY: JPY Pressure Re-Emerges As Yield Differentials Widen

Last updated at:Jun-14 18:20By: Jack Lewis
  • The Fed’s hawkish projections for rates continues to widen the US-Japan yield differential, further underpinning the continued support for USDJPY. As noted yesterday following the CPI data, dips continue to be both well supported and technically corrective.
  • The immediate focus is on 140.45, the June 05 high, however attention is on key resistance at the top of a bull channel drawn from the Jan 16 low. The line intersects at 141.35 today and a clear break of this hurdle would reinforce a bullish theme and open 142.25, the Nov 21 2022 high.
  • Worth noting that the Bank of Japan meeting/decision is this Friday. On Tuesday, MNI reported that there is no prospect that the Bank of Japan will scrap yield curve control this year, because even if policymakers become confident of a virtuous cycle between wage hikes and price rises they would still want to avoid any sharp rise in interest rates, MNI understands.

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