BOJ rate hike likely, yen rally at risk
BOJ expected to hike rates next week, but yen rally may be limited if Ueda signals caution.
ECB's Nagel said the global economy remains on a growth trajectory despite Middle East tensions and welcomed coordinated JPY intervention.
ECB policymaker Joachim Nagel addressed current economic conditions, noting that the global economy continues its growth path even amid Middle East tensions.
USDJPY is trading above its 100-day moving average, which is located at 160.01.
EURJPY has been fluctuating around its 100-hour and 200-hour moving averages near 185.57 and 185.63. The convergence of these moving averages suggests an imminent directional move. Support to the downside comes from the 100-day moving average at 185.099. Below that, the 100-hour and 200-hour moving averages on the four-hour chart are around 184.85 and 184.76, followed by the 200-day moving average at 184.266. On a move higher, resistance is seen in the 185.93–185.03 range.
Separately, ECB official Simkus commented that the September rate hike will not be sufficient.
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BOJ expected to hike rates next week, but yen rally may be limited if Ueda signals caution.
The yen hit a six-month high against the dollar as BOJ hike bets built, while China's August imports missed forecasts and the Kospi gained nearly 2%.
PBOC set the yuan central rate at 6.7804 per dollar, above estimates, and conducted a net 4 billion yuan drain via reverse repos.
MUFG sees ECB hike this week, highlights euro downside risk from Lagarde's comments, German elections, and gas prices.