USD/JPY Forecast: Navigating Volatility Amid BoJ Rate Hike Speculation and US Data

Industrial Production Signals Impact on USD/JPY

USD/JPY will be highly influenced by Japan's industrial production figures, which are scheduled for release on October 15. Recent data revealed a substantial decline of 3.3% year-on-year in August, following a 3.3% increase in July. A downward revision could dampen expectations for a late Q4 2024 Bank of Japan (BoJ) rate hike, potentially pushing the USD/JPY toward 151 or below 149, depending on market reactions.

Expert Insights on Monetary Policy Direction

Commentary from BoJ Deputy Governor Ryozo Himino highlights readiness to adjust interest rates based on economic alignment with projections. Additionally, Prime Minister Shigeru Ishiba's commitment to non-intervention reassures markets about the BoJ's independence.

US Economic Indicators to Watch

The USD/JPY is also sensitive to US consumer inflation expectations and the NY Empire Manufacturing Index. Expectations are forecasted to dip slightly, which could prolong purchases that directly impact inflation.

Short-Term Outlook for USD/JPY

Upcoming trade and inflation data will be pivotal for USD/JPY trends. Weaker results may stifle BoJ rate hike expectations, impacting Japanese Yen demand. Conversely, robust US data could bolster USD/JPY upward.

Technical Analysis - Monitoring Key Levels

The USD/JPY currently hovers above the 50-day and 200-day EMAs, indicating bullish momentum. A retreat to 150 could set the stage for a push towards the 151.685 resistance level.