Chart of the day - USDJPY (27.02.2024)

Japanese yen is one of the best performing G10 currencies today. JPY caught a bid following release of Japanese CPI inflation report for January. Data showed core CPI inflation slowing from 2.3% to 2.0% YoY, while economists expected a slowdown to 1.8% YoY. Headline CPI inflation slowed from 2.6% to 2.2% YoY (exp. 1.9% YoY). A smaller than expected deceleration in price growth can be seen as 'hawkish' development, and it is keeping up market hopes for  Bank of Japan to exit negative rates. Currently, money market are pricing in an around-80% chance of BoJ hiking rates out of negative territory at its meeting in April.

Taking a look at USDJPY chart at H1 interval, we can see that the pair has been trading sideways in the 149.85-150.75 range recently. The pair broke below the 200-hour moving average (purple line) today. A point to note is that this moving average has acted as a kind of moving, upward trendline recently, therefore a drop below may hint that a deeper decline is looming. A near-term support level to watch can be found in the 149.85 and 149.60 areas. The pair may experience some additional volatility this afternoon when US durable goods orders report for January and Conference Board index for February are released at 1:30 pm GMT and 3:00 pm GMT, respectively.

Source: xStation5