According to FXStreet, the USD/JPY pair rose to near 144.60 in early Asian trading this morning, September 26. The main reason was the weakness of the US dollar (USD) due to expectations that the Fed will cut interest rates sharply in November, which continued to affect the pair. Investors are waiting for new economic data and signals from the Fed about the upcoming interest rate cut.
New home sales fell 4.7% in August to 716,000 units, down from a revised 751,000 in July, the Commerce Department said, but still beat market expectations. Earlier, a weaker-than-expected report on U.S. consumer sentiment raised concerns about the labor market and fueled expectations for deeper interest rate cuts by the Federal Reserve.
On the Japanese side, the Bank of Japan (BoJ) will release the minutes of its July policy meeting on Thursday. BoJ members called for a slow and cautious rate hike. Some said a 0.25% rate hike was needed to adjust the level of monetary support, while others wanted a more gradual adjustment.
Japanese Finance Minister Shunichi Suzuki said on Tuesday that the BoJ will continue to implement appropriate monetary policy and coordinate with the government. If the BoJ delays raising interest rates, it could weaken the JPY and help maintain the upward momentum of USD/JPY.
Despite the recovery during the trading session, USD/JPY remains bearish, as the pair remains below the Ichimoku cloud (Kumo) and the 200-day moving average (DMA).
The Relative Strength Index (RSI) has just crossed above its neutral line, opening the possibility of further upside in the short term.
In this scenario, the next resistance level for USD/JPY would be at 145.00, before testing the 50-day moving average at 146.73. If it continues to be strong, the pair could reach 147.00.
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 144.44 JPY and the highest at 144.77 JPY.
