The Japanese Yen (JPY) has drifted lower against the US Dollar (USD) on Wednesday, approaching its lowest level since August 16. Recent data revealed a 0.6% decline in real wages and a 1.9% drop in household spending in August, casting doubt on the strength of private consumption and the potential for a sustained economic recovery. Comments from Japan’s new Prime Minister, Shigeru Ishiba, suggesting a lack of conditions for further rate hikes have further weighed on the JPY and raised uncertainty about the Bank of Japan‘s (BoJ) monetary policy.
Additionally, the potential for a Hezbollah-Israel ceasefire has diminished demand for the safe-haven Yen, while the USD approaches a seven-week high, buoyed by reduced expectations for aggressive rate cuts by the Federal Reserve (Fed). This dynamic has pushed the USD/JPY pair into the mid-148.00s, although concerns about possible intervention by Japanese authorities to support the Yen may temper bullish momentum ahead of the release of the FOMC meeting minutes later.
On a technical note, the USD/JPY pair needs to maintain acceptance above the 149.00 mark for bulls to gain control. While dip-buying has emerged following a breach of the 50-day Simple Moving Average, resistance is expected near the 148.70 level and the psychological 150.00 mark. Conversely, support is noted around 147.30-147.35, with a decisive break below 147.00 potentially leading to further declines toward the 146.45 level and beyond.
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