FX Empire – Japan Producer Prices
Bookmark our real-time updates to stay ahead of USD/JPY volatility.
USD/JPY Outlook: Economic Indicators and the BoJ
Bullish Yen Scenario: Upbeat Japanese data or hawkish BoJ rhetoric could drag USD/JPY toward 145.
Bearish Yen Scenario: Weaker data or dovish policy signals may send the pair toward 150.
The US economic calendar will likely determine the likelihood of an October Fed rate cut this week. Labor market data, consumer sentiment, and Fed speakers will be in the spotlight.
Key events include:
Initial Jobless Claims (October 9): Expected to increase from 218k (week ending September 20) to 223k (week ending September 27).
Michigan Consumer Sentiment (October 10): Forecast to fall from 55.1 in September to 55.0 in October.
Nonfarm Payrolls (provisionally October 10): Expected to increase by 39k in September after a 22k rise in August.
Unemployment Rate (provisionally October 10): Forecast to remain at 4.3% in September.
Average Hourly Earnings (provisionally October 10): Expected to rise 3.7% year-on-year in September, mirroring August’s increase.
Weaker-than-expected US labor market data and consumer sentiment could fuel bets on aggressive Fed rate cuts. A more dovish Fed rate path would weigh on the US dollar and the USD/JPY pair.
On the other hand, stronger-than-expected labor market data and an upswing in consumer confidence could signal a less dovish Fed policy stance. Fading bets on multiple Fed rate cuts in the fourth quarter would lift US dollar demand and send USD/JPY higher.
Traders should be aware that the labor market data may face more delays if lawmakers fail to pass a stopgap funding bill. The US government shutdown postponed last week’s jobless claims data and the US jobs report.
Beyond the data, traders should also monitor Fed speeches, including remarks from Fed Chair Powell on Thursday, October 9. There is also a wave of Fed speakers scheduled throughout the week and the FOMC meeting minutes to consider.
Short-term Forecast:
Bullish US Dollar Scenario: Strong US economic data or hawkish Fed rhetoric may send USD/JPY toward 150.
Bearish US Dollar Scenario: Weaker US data or dovish Fed signals could push USD/JPY toward 145.
USD/JPY Price Action
Daily Chart
On the daily chart, USD/JPY trades below the 50- and 200-day Exponential Moving Averages (EMAs), signaling a bearish bias.
A breakout above the 50- and 200-day EMAs could pave the way toward the 149.358 resistance level. A sustained move through 149.358 may bring the August high of 150.917 into play.
On the downside, a break below last week’s low of 146.585 could expose the crucial 145 support level. If breached, the July low of 142.681 would be the next key support level.
AloJapan.com