The Japanese Yen is falling as investors consider the Bank of Japan's (BoJ) policy outlook, according to FXStreet. BoJ Governor Kazuo Ueda said the bank will monitor market and economic conditions before deciding on a policy change, suggesting that there is no immediate need to raise interest rates. Meanwhile, the US Dollar is struggling as investors expect the Fed to hold off on raising interest rates in the near future.
On Wednesday, the USD/JPY pair was trading around 143.40. Based on the daily chart, the pair is moving in a downtrend, suggesting that the Japanese Yen may weaken further. The RSI (trend strength indicator) shows that the bearish sentiment is still dominant.
The USD/JPY pair is currently testing the support level of 143.03. If the rate falls below this level, it could fall to the 139.58 area, the lowest level since June 2023.
On the other hand, if USD/JPY rises and breaks above 144.10, it could challenge the psychologically important 145.00 level.
The Japanese yen continued to weaken against the US dollar on Wednesday as investors analyzed the BoJ's policy outlook. On Tuesday, BoJ Governor Kazuo Ueda said the bank has time to consider economic conditions before deciding on a policy adjustment, and there is no need to raise interest rates at this time.
Mr. Ueda also emphasized that Japan's real interest rates are still very low, which helps stimulate the economy and increase prices. In addition, Finance Minister Shunichi Suzuki expected the Bank of Japan to take appropriate steps in accordance with the situation and coordinate closely with the government.
Traders are now awaiting the minutes of the BoJ's policy meeting on Thursday, along with Tokyo inflation data on Friday, for further clues on upcoming monetary policy moves.
Meanwhile, the US dollar also faced downward pressure after US consumer confidence data came in lower than expected, increasing the possibility that the Fed will not raise interest rates soon.
According to Lao Dong, at 3:00 p.m. on September 25, the exchange rate of the Japanese Yen against the US dollar is currently hovering around the lowest level of the day at 142.91 JPY and the highest at 144.03 JPY.
