USD/JPY - Dollar-yen hovers around six-month highs - 01/09/2025 (GMT)

As with euro-dollar, the main fundamental factor recently for dollar-yen has been monetary policy. The Bank of Japan’s recent moderate hawkishness seems more questionable now with real annual wages having fallen recently while the Fed seems to be confirmed to cut only twice this year.

The break above ¥158 in the last few days hasn’t led to a clear breakout but a small retracement lower. In the context of the slow stochastic having signalled overbought consistently for nearly a month now, that might suggest that consolidation or possibly losses are more likely than another immediate movement upward. ATR has been extremely low recently, which could also signal a change of direction.

Within the wide channel between ¥161 and ¥150 there’s considerable scope for movement around important upcoming data from the USA. A more positive NFP would usually suggest higher inflation also, but there are exceptions to this.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.