The Japanese yen (K{U}) weakened as the market shrugged off solid domestic data and turned its attention to conditions ahead and Friday’s Bank of Japan (BOJ) meeting, where a rate hike and a more hawkish approach are widely expected, reports Shaun Osborne and Eric Theoret, chief FX strategists at Scotiabank.
USD/JPY rises despite strong Japan data
“The JPY is down 0.5% against the USD and underperforming all G10 currencies except the GBP. Broad growth looks to dominate as we see stronger than expected trading and an absence of any material reaction to the release of machine orders data.”
“Positioning may also play a role as market participants adjust to near-term event risks and the BOJ policy decision on Friday. A 25bpt hike is widely expected, and policymakers are expected to support a higher rate path into 2026 with a wide trading band for longer-term yields.”
“For USD/JPY, we continue to highlight the importance of near-term support at the 50-day MA (154.27) and anticipate near-term resistance above 156.50.”
