{"id":16412,"date":"2024-12-27T02:44:18","date_gmt":"2024-12-27T02:44:18","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=16161"},"modified":"2024-12-27T02:44:18","modified_gmt":"2024-12-27T02:44:18","slug":"yen-dips-pressured-by-boj-and-fed-policies","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/yen-dips-pressured-by-boj-and-fed-policies\/","title":{"rendered":"Yen Dips, Pressured by BOJ and Fed Policies"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-medium-font-size\">Key Points<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>USD\/JPY remains under pressure<\/strong>, losing over <strong>10% in 2024<\/strong>, its fourth straight year of decline.<\/li>\n\n\n\n<li><strong>BOJ policy stance<\/strong> hints at a possible January rate hike, while the Fed signals slower rate cuts in 2025.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p class=\"wp-block-paragraph\">The USD\/JPY pair ended the week at <strong>157.80<\/strong>, reflecting persistent weakness in the yen against the robust US dollar. The currency pair has been underpinned by a wide interest rate gap, with the Federal Reserve holding rates steady while the BOJ has kept its ultra-loose policy intact.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Fed Chair Powell says it&#39;s too early to predict Trump&#39;s tariff impact. <a href=\"https:\/\/t.co\/K0X63ez18D\">pic.twitter.com\/K0X63ez18D<\/a><\/p>&mdash; Yahoo Finance (@YahooFinance) <a href=\"https:\/\/twitter.com\/YahooFinance\/status\/1871742157452685750?ref_src=twsrc%5Etfw\">December 25, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">A stronger US dollar has also contributed to the yen&#8217;s decline, supported by the <strong>US Dollar Index (USDX)<\/strong>, which held firm at <strong>108.11<\/strong>, close to a two-year high. The dollar&#8217;s resilience has been bolstered by elevated <strong>US Treasury yields<\/strong>, with the <strong>10-year yield<\/strong> at <strong>4.57%<\/strong>, the highest since early May.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>See also: <a href=\"https:\/\/www.vtmarkets.com\/analysis\/us-dollar-climbs-near-two-year-high\/\">US Dollar Climbs Near Two-Year High<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Traders remain cautious as the yen approaches <strong>160 per dollar<\/strong>, a level that could trigger Tokyo&#8217;s intervention to stabilise the currency.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/12\/image-20-1024x448.jpeg\" alt=\"\" class=\"wp-image-16162\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>Picture: USDJPY retreats near 157.71 as momentum cools, eyeing support at 157.65 and resistance at 158.08, as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\" title=\"\">VT Markets app.<\/a><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The charts show a slight pullback for the USDJPY pair, closing at 157.717 after testing a session high of 158.081. Signs indicate its momentum weakening, with moving averages flattening and the MACD histogram shrinking as the session progressed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Price action remains range-bound, holding above key support at 157.65 while struggling to break past 158.08 resistance, reflecting cautious sentiment amid mixed monetary policy signals from the Bank of Japan and the Federal Reserve.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">BOJ\u2019s Potential Rate Hike and Implications<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The BOJ kept rates unchanged in December but signalled a potential shift soon. The <strong>summary of opinions<\/strong> from the December meeting released on Friday suggested the possibility of a <strong>January rate hike<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">BOJ board divided on how soon to hike rates, December summary shows <a href=\"https:\/\/t.co\/6snznS7lTe\">https:\/\/t.co\/6snznS7lTe<\/a> <a href=\"https:\/\/t.co\/YfZ3tXV5dI\">pic.twitter.com\/YfZ3tXV5dI<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1872439822188437526?ref_src=twsrc%5Etfw\">December 27, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">A move to <a href=\"https:\/\/t.co\/kPji7EHgz9\">raise rates<\/a> would narrow the interest rate differential with the US and offer some relief to the yen.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the impact of any BOJ rate hike is <a href=\"https:\/\/t.co\/Pq3I1DT5gH\">likely to be modest<\/a> unless accompanied by a clear roadmap for tightening monetary policy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Market participants remain sceptical about the BOJ&#8217;s ability to counteract the structural drivers of yen weakness, particularly as the Fed remains cautious in cutting rates.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-medium-font-size\">Fed\u2019s Influence on USD\/JPY<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Federal Reserve\u2019s <a href=\"https:\/\/t.co\/mWDl5GSseU\">December decision<\/a> to lower rates by <strong>25 basis points<\/strong> while projecting only two cuts for 2025 signals a slower pace of easing than markets had anticipated. This has limited downward pressure on US Treasury yields, reinforcing the dollar&#8217;s appeal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Traders are now pricing at <strong>37 basis points of easing<\/strong> for 2025, with the <a href=\"https:\/\/t.co\/aKukLKJaT3\">first rate cut expected<\/a> by June.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Any signs of stronger-than-expected US economic data or persistent inflation could delay these cuts further, keeping the USD\/JPY pair elevated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>\u00a0and\u00a0<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>\u00a0now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The yen remains weak amid BOJ rate hike speculation and strong US dollar; intervention risk looms. &#8211; vtmarkets.com <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[12],"class_list":["post-16412","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-forex"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/16412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=16412"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/16412\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=16412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=16412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=16412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}