- The Japanese yen gains value following the release of the Jibun Bank Services PMI on Wednesday.
- Yoshimasa Hayashi from Japan closely follows developments on the domestic and international market.
- The US dollar remains steady as investors remain cautious ahead of US jobs data.
The Japanese Yen (JPY) continued to strengthen against the U.S. Dollar (USD) following the release of Jibun Bank Services PMI data on Wednesday. The index was revised to 53.7 in August from an initial estimate of 54.0. While this marks the seventh straight month of expansion in the services sector, the latest value remains unchanged from July.
Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said on Wednesday that he is “closely monitoring domestic and international market developments with a sense of urgency.” Hayashi stressed the importance of managing fiscal and economic policies in close cooperation with the Bank of Japan (BoJ). He also stressed the need to assess market movements calmly, but declined to comment on day-to-day stock fluctuations.
The US dollar is receiving support as traders remain cautious ahead of US employment data, particularly the August Nonfarm Payrolls (NFP). This data could provide further insight into the potential timing and scale of interest rate cuts from the Federal Reserve (Fed).
Daily Market Update: Japanese Yen Continues to Rise on Hawkish BoJ Sentiment
- The ISM manufacturing PMI rose to 47.2 in August from 46.8 in July, missing market expectations of 47.5. It marked the 21st decline in U.S. manufacturing activity in the past 22 months.
- Japan on Tuesday announced a plan to allocate 989 billion yen to fund energy subsidies in response to rising energy costs and resulting upward pressure on the cost of living.
- The U.S. Bureau of Economic Analysis reported Friday that the headline personal consumption expenditures (PCE) price index rose 2.5% year over year in July, matching the previous reading of 2.5% but falling brief of the 2.6% estimate. Meanwhile, the core PCE index, which excludes volatile food and energy prices, rose 2.6% year over year in July, matching the previous reading of 2.6% but falling slightly brief of the consensus forecast of 2.7%.
- The Tokyo Consumer Price Index (CPI) rose to 2.6% year-on-year in August, from 2.2% in July. The core CPI also rose to 1.6% year-on-year in August, from 1.5% previously. In addition, Japan’s unemployment rate unexpectedly rose to 2.7% in July, compared with both market and June estimates of 2.5%, marking the highest unemployment rate since August 2023.
- Federal Reserve Bank of Atlanta President Raphael Bostic, a prominent hawk on the FOMC, suggested last week that it might be “time to act” on interest rate cuts because of continued withering inflation and a higher-than-expected unemployment rate. FedTracker FXStreet, which rates the tone of Fed officials’ speeches on a dovish-to-hawkish scale from 0 to 10 using a custom AI model, gave Bostic’s remarks a neutral score of 5.6.
- U.S. gross domestic product (GDP) rose by an annualized 3.0% in the second quarter, exceeding both the expected and previous growth rate of 2.8%. Additionally, initial jobless claims data showed that the number of people filing for unemployment benefits fell to 231,000 in the week ending August 23, down from the previous 233,000 and slightly below the expected 232,000.
- Japan’s Finance Minister Shunichi Suzuki said last week that many factors affect foreign exchange rates, including monetary policy, interest rate differentials, geopolitical risks and market sentiment. Suzuki added that it was arduous to predict how these factors would affect exchange rates.
Technical Analysis: USD/JPY Reacts to 21-Day EMA, Further Downside Pressure Expected
USD/JPY is trading around 145.40 on Wednesday. An analysis of the daily chart shows that the nine-day exponential moving average (EMA) is below the 21-day EMA, which signals a bearish trend in the market. Furthermore, the 14-day relative strength index (RSI) remains below 50, which further confirms that the bearish trend is still ongoing.
For the USD/JPY pair, support can be found near the August 5 seven-month low of 141.69, with the next key support level being found near 140.25.
On the downside, the pair could first encounter resistance at the 9-day EMA at 145.63 and then at the 21-day EMA at 146.73. A break of this level could pave the way for the psychological barrier of 150.00, with further resistance at 154.50, which has turned from support to resistance.
USD/JPY: Daily Chart
Japanese Yen Exchange Rate Today
The table below shows the percentage change in the Japanese Yen (JPY) against the major currencies traded today. The Japanese Yen was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | 0.03% | -0.20% | -0.08% | 0.20% | 0.17% | -0.19% | |
| EUR | 0.10% | 0.14% | -0.11% | 0.05% | 0.31% | 0.31% | -0.10% | |
| GBP | -0.03% | -0.14% | -0.25% | -0.09% | 0.17% | 0.19% | -0.24% | |
| JPY | 0.20% | 0.11% | 0.25% | 0.13% | 0.39% | 0.38% | -0.01% | |
| BOOR | 0.08% | -0.05% | 0.09% | -0.13% | 0.26% | 0.28% | -0.15% | |
| AUD | -0.20% | -0.31% | -0.17% | -0.39% | -0.26% | 0.00% | -0.39% | |
| NZD | -0.17% | -0.31% | -0.19% | -0.38% | -0.28% | -0.00% | -0.41% | |
| CHF | 0.19% | 0.10% | 0.24% | 0.00% | 0.15% | 0.39% | 0.41% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
