The yen remains under pressure amid speculation that the Bank of Japan may forgo a rate hike at its December 19 meeting, with only a 23% market-implied probability of a policy adjustment.
Key Points
- The USDJPY pair continues its bullish trend, gaining +0.54% today after Thursday’s +0.12% rise.
- A strong U.S. dollar, supported by cautious Fed rate cut expectations for 2025, has pushed USDJPY higher.
- No significant economic data is expected today, but market participants should watch for unexpected events.
USD/JPY Daily Price Analysis – 13/12/2024
The USD/JPY pair continues its bullish trajectory, with today’s trading opening at 152.626 and climbing to a current level of 153.472, marking a daily gain of +0.54%. This follows Thursday’s increase of +0.12%, where the pair closed at 152.649.
The ongoing strength in the pair is largely driven by a robust U.S. dollar, supported by evolving Federal Reserve policy expectations, and a weakened Japanese yen amid market speculation surrounding the Bank of Japan’s next move.
The U.S. dollar has maintained a strong footing in recent sessions, with the dollar index climbing to 107.11, its highest level in a month, and achieving a weekly gain of 1.1%. This performance reflects investor sentiment that the Federal Reserve will adopt a more cautious approach to rate cuts in 2025.
Recent economic data from the United States, including cooling job market indicators and subdued producer price inflation, have reinforced expectations for a Fed rate cut at the upcoming December 18 meeting. However, uncertainty lingers around the timing of subsequent cuts, with March 2025 emerging as the most likely period for another reduction.
The Japanese yen has faced consistent pressure against the dollar this week, with USD/JPY gaining 2% on the yen. Reports from reliable sources suggest that the BoJ may forgo a rate hike at its December 19 meeting as policymakers wait for clearer evidence of sustained wage growth and assess how U.S. monetary policy evolves under incoming President Donald Trump.
The market is currently pricing in only a 23% probability of a BoJ hike at this meeting. Analysts note that if the BoJ does decide to implement a hike exceeding 15 basis points, the yen could strengthen significantly, leading to a downside move in USD/JPY. Conversely, a decision to leave rates unchanged would likely result in further upward momentum for the pair.
Broader global developments are also influencing the USD/JPY pair. The U.S. dollar has benefitted from its safe-haven status amid a risk-off sentiment in financial markets, driven in part by weaker-than-expected economic data from the United Kingdom and recent rate cuts by the European Central Bank and Swiss National Bank. These factors have added to the dollar’s appeal and provided additional support for its rally against the yen.
Key Economic Data and News to Be Released Today
At present, there are no significant economic data releases scheduled that are likely to have a direct impact on USD/JPY movements today. However, market participants should remain vigilant for any unscheduled announcements or geopolitical developments that could influence sentiment and lead to heightened volatility.
USD/JPY Technical Analysis – 13/12/2024
USD/JPY is currently at a key level zone. This zone, although acting as a resistance level, is most likely not going to hold the price down because the RSI is not yet overbought and the bullish momentum doesn’t seem like it is going to die down anytime soon.
So, we may expect a minor reaction at this key level, but overall, we are expecting the price to break out of the zone and continue its bullishness.
On the 15-minute chart, we see that price is overbought and a bullish trendline is also forming just below price action, since we are anticipating a bullish movement from the higher timeframe, we can expect price to retrace to the trendline, give us a bullish candlestick pattern and continue to the upside.
On the other hand, should the price break through the trendline to the downside, we can expect the price to dip a little into the support zone just below the current price.
USD/JPY Fibonacci Key Price Levels 21/11/2024
Short-term traders planning to invest in USD/JPY today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 152.037 | 152.780 |
| 151.807 | 153.010 |
| 151.436 | 153.382 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
