Japanese Yen and Aussie Dollar News: BoJ vs. Fed Rate Path Battle Heats Up


FX Empire – Japan Retail Sales

The lower unemployment rate and jump in consumer spending could raise expectations of another BoJ rate hike in H1 2025. December’s data was significant as the BoJ has highlighted a willingness to tighten monetary policy further if economic indicators support the move.

On January 30, BoJ Deputy Governor Himino reinforced Governor Kazuo Ueda’s stance, stating that further policy moves hinge on economic and price developments. He added that the BoJ will raise rates if the economy and prices align with forecasts.

A more hawkish BoJ rate path would pressure the USD/JPY pair, potentially pulling it toward the 153 level.

Shifting to the US, the Personal Income and Outlays report could dictate the near-term Fed rate path. Economists expect the Core PCE Price Index to rise 2.8% year-on-year in January, mirroring December’s increase.

Higher inflation could dampen expectations for an H1 2025 Fed rate cut, supporting a USD/JPY move toward the 50-day Exponential Moving Average (EMA). A break above the 50-day EMA would bring the 156.884 resistance level into play.



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