- The Japanese Yen depreciated following the release of Manufacturing PMI on Friday.
- The headline Jibun Bank Japan Manufacturing PMI registered at 49.2 in October, reflecting a decrease from 49.7 in September.
- US Nonfarm Payrolls are expected to increase by 113,000 jobs in October, a decline from the previous count of 254,000.
The Japanese Yen (JPY) retraces some of its recent gains following the release of the Manufacturing Purchasing Managers Index (PMI) by Jibun Bank and S&P Global on Friday. However, the USD/JPY pair declined as the JPY strengthened after post-meeting comments from Bank of Japan (BoJ) Governor Kazuo Ueda on Thursday, which were seen as increasing the likelihood of a rate hike in December.
The headline au Jibun Bank Japan Manufacturing PMI stood at 49.2 in October, indicating a decline from 49.7 in September. This composite single-figure indicator shows that Japanese manufacturing production continued to decline at the beginning of the fourth quarter of 2024, with both output and new order inflows decreasing at more pronounced rates.
Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated on Friday that he anticipates the Bank of Japan will collaborate closely with the government to implement appropriate monetary policy aimed at achieving its price target in a sustainable and stable manner.
Traders are anticipating the release of the US Nonfarm Payrolls (NFP) report on Friday, with expectations that the US economy added 113,000 jobs in October, while the Unemployment Rate is forecasted to remain steady at 4.1%.
Daily Digest Market Movers: Japanese Yen depreciates despite increased odds of BoJ rate hikes
- The USD/JPY pair gains ground as the US Dollar (USD) breaks its four-day losing streak due to ongoing market caution amid uncertainty leading up to the upcoming US presidential election. However, the Greenback encountered difficulties following the release of the Personal Consumption Expenditures (PCE) Price Index data on Thursday.
- The US Personal Consumption Expenditures (PCE) Price Index showed that core inflation increased by 2.7% year-over-year in September. Additionally, Initial Jobless Claims dropped to a five-month low of 216,000 for the week ending October 25, signaling a robust labor market and lessening expectations for imminent rate cuts by the Federal Reserve (Fed).
- The Bank of Japan decided to keep its short-term interest rate target at 0.25% following the conclusion of its two-day monetary policy review on Thursday. This decision was in line with market expectations for maintaining stability.
- According to the BoJ Outlook Report for Q3, the central bank plans to continue raising policy rates as long as the economy and prices align with its forecasts, particularly given that real interest rates are currently very low. The Bank of Japan aims to conduct monetary policy with a focus on sustainably and stably achieving its 2% inflation target.
- US Gross Domestic Product (GDP) annualized expanded by 2.8% in Q3, below 3.0% in Q2 and forecasts of 3.0%. The ADP Employment Change report showed that 233,000 new workers were added in October, marking the largest increase since July 2023. This followed an upward revision to 159,000 in September and significantly exceeded forecasts of 115,000.
- On Tuesday, the US Bureau of Labor Statistics (BLS) reported that JOLTS Job Openings reached 7.443 million in September, down from 7.861 million in August and falling short of the market expectation of 7.99 million.
- Japan’s Economy Minister Ryosei Akazawa remarked on Tuesday that a weaker Yen could drive up prices via higher import costs, potentially reducing real household income and dampening private consumption if wage growth does not keep pace.
- Japan’s Liberal Democratic Party (LDP)-coalition lost its parliamentary majority in Sunday’s election, which has increased uncertainty regarding the Bank of Japan’s (BoJ) rate-hike plans.
Technical Analysis: USD/JPY may re-enter the ascending channel to strengthen its bullish bias
The USD/JPY pair trades around 152.40 on Friday. Daily chart analysis indicates the potential softening of the bullish bias, as the pair has broken below its ascending channel. However, the 14-day Relative Strength Index (RSI) remains above the 50 mark, suggesting that bullish momentum is active.
In terms of resistance, the USD/JPY pair faces resistance at the lower boundary of the ascending channel, which is at the 152.50 level. If the pair successfully re-enters this channel, it could target the upper boundary around the 158.30 level.
On the downside, support for the USD/JPY pair may be found around the 14-day Exponential Moving Average (EMA) at the 151.50 level, with further support around the psychological level of 150.00.
USD/JPY: Daily Chart
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.07% | 0.35% | 0.00% | 0.19% | 0.01% | 0.09% | |
| EUR | -0.10% | -0.03% | 0.25% | -0.09% | 0.08% | -0.06% | -0.01% | |
| GBP | -0.07% | 0.03% | 0.29% | -0.06% | 0.12% | -0.05% | -0.02% | |
| JPY | -0.35% | -0.25% | -0.29% | -0.35% | -0.16% | -0.34% | -0.27% | |
| CAD | -0.01% | 0.09% | 0.06% | 0.35% | 0.17% | 0.02% | 0.04% | |
| AUD | -0.19% | -0.08% | -0.12% | 0.16% | -0.17% | -0.16% | -0.15% | |
| NZD | -0.01% | 0.06% | 0.05% | 0.34% | -0.02% | 0.16% | 0.03% | |
| CHF | -0.09% | 0.00% | 0.02% | 0.27% | -0.04% | 0.15% | -0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick 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).
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.