- The USD/JPY forecast indicates continued yen weakness amid political uncertainty in Japan.
- The Secretary General of Japan’s ruling party is planning to resign.
- Economists are predicting a low US job growth of 75,000.
The USD/JPY forecast indicates continued yen weakness amid political uncertainty in Japan. Meanwhile, the dollar is on the front foot as market participants prepare for Friday’s crucial US employment report.
–Are you interested in learning more about forex indicators? Check our detailed guide-
The yen slid on Tuesday after reports that the Secretary General of Japan’s ruling party was planning to resign. Hiroshi Moriyama is a close ally of Prime Minister Shigeru Ishiba. Therefore, such a move will likely further weaken Ishiba’s position. Since he lost the election, there have been calls for Ishiba to resign. His resignation would create uncertainty in Japan’s politics that could further weaken the yen.
“On the surface, political uncertainty and the possibility that Prime Minister Shigeru Ishiba could resign in the coming days or weeks is having a debilitating impact on the yen,” said Kit Juckes, Societe Generale’s chief global FX strategist.
Meanwhile, the dollar gained amid yen weakness as traders awaited the next major catalysts from the US. Friday’s nonfarm payrolls report could show further weakness in the labor market. Economists are predicting a low job growth of 75,000 and a higher unemployment rate of 4.3%. Unexpected softness would increase expectations for Fed rate cuts this year, weighing on the dollar. On the other hand, resilience in the labor market could ease rate cut expectations, boosting the greenback.
USD/JPY key events today
USD/JPY technical forecast: Bulls face the 148.75 range resistance
On the technical side, the USD/JPY price has rallied to challenge the 148.75 key resistance level. It trades well above the 30-SMA, with the RSI near the overbought region, suggesting a bullish bias. However, the price still trades within its consolidation area, with support at the 146.50 level and resistance at the 148.75 level.
–Are you interested in learning more about next cryptocurrency to explode? Check our detailed guide-
If bulls manage to break out of the consolidation area, the price will rally to retest the 150.70 resistance level. At the same time, it could initiate a bullish trend characterized by higher highs and higher lows. On the other hand, if the level holds firm, the price will likely drop to retest the range support. This means it could remain in consolidation for an extended period.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
