"The USD/JPY pair is moving on a volatile path, reflecting the uncertainty that dominates global markets. The pair managed twice to approach the 149.00 level during Wednesday's trading, even briefly reaching its highest level in five weeks at 149.14, but it failed to break above the 200-day EMA near 148.22. This reveals a lack of momentum, as traders await the pivotal U.S. economic data scheduled for release this week."
"Despite recent inflation data showing some resilience, market expectations still lean toward policymakers overlooking these readings and opting for a 25-basis-point rate cut if labour market data come in weak. From my perspective, this equation imposes a double constraint on the USD/JPY exchange rate. On one hand, the dollar derives strength as a haven amid global volatility, but on the other, any confirmation of weakness in the U.S. labour market increases the likelihood of monetary easing, which could cap the greenback's gains against the yen."
The USD/JPY pair traded volatile, approaching 149.00 twice and briefly reaching 149.14, but failed to clear the 200-day EMA near 148.22. Momentum is weak as traders await pivotal U.S. economic data, particularly ADP, ISM Services PMI, and Nonfarm Payrolls. The situation reflects a fragile balance between Japanese domestic market pressures and U.S. monetary policy expectations increasingly tied to labour market outcomes. A weak U.S. labour print would increase odds of a 25bp Fed rate cut on September 17 and cap dollar gains; a strong set of reports could bolster the dollar and reshape short-term expectations.
Read at London Business News | Londonlovesbusiness.com
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