Japanese Yen languishes near YTD low, bears remain cautious amid softer USD

JPY’s mild positive trend against USD in early European trade reflects cautious global sentiment.

Reports of Chinese sovereign fund stability limit JPY ascent; USD slides on profit-taking ahead of expected Fed hawkishness.

BoJ’s hawkish signals and global concerns create a delicate balance, restricting JPY losses but capping significant USD/JPY gains.

BoJ hints at the March/April interest rate lift, adding complexity to JPY’s movements.

Geopolitical tensions and China’s slowdown bolster JPY resilience.

Caution urged in trading; lack of impactful US releases, and FOMC speeches may induce volatility.

JPY struggles amid hawkish Fed expectations, shaping a delicate market sentiment.

Ongoing concerns about geopolitical tensions in the Middle East and China’s economic slowdown contribute to market fragility.

China’s Central Huijin Investment boosts ETF investment, and vows market stability, providing a stabilizing factor.

BoJ signals conditions favour stimulus phase-out and rate hikes, introducing hawkish undercurrents.

Japan’s real wages continue a 21-month decline, dropping 1.9% in December; household spending is down for the tenth consecutive month.

Investors adjust expectations on Fed rate cuts; ISM reports US services sector growth, boosting USD.

CME Fedwatch: Reduced bets on March rate cut, traders expect five cuts for this year compared to six previously.

Minneapolis Fed President Neel Kashkari suggests a higher neutral rate, allowing for patient rate cut assessments.

Chicago Fed President Austan Goolsbee acknowledges strong US economy, refrains from commenting on rate cut timing.

Tuesday’s FOMC speeches are expected to play a pivotal role in shaping USD demand and providing impetus to the USD/JPY pair.

Bulls await a sustained breakout through 148.75-148.80 resistance for fresh bets.

The daily chart’s positive territory signals potential gains beyond the psychological 149.00 mark.

Immediate downside protection at 148.00; further decline may attract fresh buyers near the 100-day Simple Moving Average (SMA).

A break below 147.55 could prompt aggressive technical selling, potentially dragging USD/JPY below 147.00.

An upside breakout above 149.00 may pave the way for additional gains, with intermediate resistance near the 149.60-149.70 region.

The table shows the JPY percentage change against major currencies; USD emerges as the weakest.

JPY’s journey through global financial complexity is influenced by geopolitics, central bank policies, and economic indicators.

Traders urged to exercise caution amid uncertainties; FOMC speeches pivotal for market shifts.

Technical analysis hints at potential USD/JPY gains, emphasizing the need for astute risk management strategies in unpredictable markets.

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