The Japanese yen (JPY) has been at its lowest point since the beginning of August, failing to make significant gains against its U.S. counterpart. However, the technical chart shows a decent bullish continuation, creating a potential continuation opportunity.
Why Is USDJPY Moving Higher?
The Bank of Japan's (BoJ) plans to raise interest rates were questioned after Japanese Prime Minister Shigeru Ishiba stated a few weeks ago that the economy was unprepared for additional rate hikes. This still weakens the need for the safe-haven Japanese yen and the generally positive mood surrounding the equity marketplaces.
Following Japanese Prime Minister Shigeru Ishiba's dovish shift at the start of October, the futures market indicates a probability lower than 50% chance that the Bank of Japan will raise interest rates by ten basis points before the year ends.
Furthermore, there were concerns about how aggressively the BoJ might increase rates given a decline in household spending, a drop in actual salaries in Japan for the first time in the past three months, and indications that price difficulties from the cost of raw materials were abating.
