According to FXstreet, the yen is being pushed up by expectations that the Bank of Japan (BOJ) will continue to adjust its monetary policy. BOJ Governor Ueda said that if economic indicators and price conditions meet expectations, there will be further rate hikes. Accordingly, the market forecasts that the policy rate is likely to peak at around 1.00% within the next two years, contributing to strengthening the yen.
The latest economic data from Japan has further boosted confidence in the economic recovery trend. The consumer price index (CPI) in Tokyo recorded an increase from 3.0% to 3.4% year-on-year in January - the highest level since April 2023. In particular, the core CPI, which excludes fresh food prices, increased by 2.5% year-on-year, indicating that domestic purchasing power is still maintained. In parallel, the indexes of industrial production and retail sales also recorded unexpected increases, helping to positively orient the Japanese economy.
In the foreign exchange market, the USD/JPY pair has maintained an important support level around 154. Experts say that, in the context of the Yen receiving support from economic signals and the BOJ's interest rate hike orientation, the possibility of a sharp decline in the JPY will be limited.
However, if the price drops below the key support at 153.70, the pair could temporarily correct towards the 153 and 152 levels – levels that coincide with the 100-day moving average, creating a trading opportunity for investors.
Meanwhile, on the resistance side, the 155 level is seen as the first hurdle. If the Yen maintains its upward momentum and breaks through this level, the USD/JPY pair could head towards the 155.40-155.45 price levels and continue to reach the weekly high around 156.25, opening up further upside prospects in the short term.
In general, the internal factors of the Japanese economy and the monetary policy orientation from the BOJ are creating momentum for the strong upward trend of the Yen. Lao Dong Newspaper will continue to update the latest developments in the foreign exchange market and important domestic and international monetary policies.
