Chart of the day - USDJPY (27.09.2024)

11:35 AM 27 September 2024

The USDJPY pair has experienced significant volatility today following major political developments in Japan and the release of new economic data. Former defense minister Shigeru Ishiba has won the Liberal Democratic Party's (LDP) leadership contest, setting him up to become Japan's new prime minister. This political shift, combined with recent inflation figures, has created a complex and dynamic environment for the currency pair.

Ishiba's victory came after a closely watched race that ended in a runoff vote against economic security minister Sanae Takaichi. The 67-year-old Ishiba, known for his willingness to criticize his own party and his focus on rural revitalization, now faces the challenge of improving the LDP's image ahead of next year's general elections. His victory has been met with mixed market reactions, reflecting uncertainty about the potential policy shifts under his leadership.

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app

The currency markets responded dramatically to these events. Initially, when it appeared that Takaichi might win, the USDJPY pair spiked above 146.00. However, as news of Ishiba's ultimate victory spread, the pair saw a sharp reversal, tumbling to around 143.80. This volatility underscores the market's sensitivity to potential changes in Japan's economic and monetary policies. Adding to the complex picture, Tokyo's latest Consumer Price Index (CPI) data showed a decrease in inflation. The CPI increased by 2.2% year-over-year in September, down from a 2.6% rise in August. This declining trend in inflation could influence the Bank of Japan's (BOJ) monetary policy decisions, which are already under scrutiny given the change in political leadership.

Ishiba's economic agenda, which includes promises of a "full exit" from Japan's high inflation rates and achieving "growth in real wages," will be closely watched by market participants. His stance on monetary policy and any potential pressure on the BOJ to adjust its ultra-loose policy could have significant implications for the Yen's value. The new prime minister-to-be also faces broader economic and geopolitical challenges. Japan's economy has been grappling with rising living costs, exacerbated by a weak Yen. Additionally, Ishiba will need to navigate Japan's crucial relationship with the United States amidst growing security challenges in Asia, including tensions with China and North Korea. For traders and investors, the key factors to watch in the coming weeks will be any signals from Ishiba about his economic priorities, potential changes in BOJ leadership or policy, and how these factors might influence inflation trends and wage growth in Japan. The USDJPY pair is likely to remain sensitive to these developments, as well as to any shifts in U.S. Federal Reserve policy expectations.

 

USDJPY (D1 interval)

USD/JPY broke through key resistance only to fall back into the downtrend channel. This level has acted as strong resistance twice before, leading to a continuation of the downtrend. Since the beginning of August, lower highs and lower lows have been observed. The resistance also aligns with the 50% Fibonacci retracement level, which served as strong resistance at the end of August. USD/JPY has now broken through the 38.2% Fibonacci retracement, which might pave the way for an easy move to the 23.6% Fibonacci retracement level at 141.869.

The RSI is trending upwards and showing bullish divergence, which could be broken soon indicating a change of trend. MACD is making higher highs and higher lows, with a recent crossover indicating a buy signal.

 

 

Share:
Back
Xtb logo

Join over 1 000 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 30 May 2024
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language