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Market News USD/JPY tries to push auction below 132.00 as US slowdown fears grow

USD/JPY tries to push auction below 132.00 as US slowdown fears grow

After more losses in the US Dollar Index, USD/JPY is seeking to shift its auction below 132.000. Fed Evans supports hiking the policy rate by 25 basis points at the Fed's next gathering. Prime Minister Kishida desires to build the groundwork for an escape from the Bank of Japan's loose monetary policy.

Alina Haynes
2023-01-09
6406

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During the early Asian session, the USD/JPY pair gave up the immediate support level of 132.00. Given the extreme volatility of the US Dollar Index, the major is expected to adjust its auction profile below 132.00. (DXY). Trading action could be lower in USD/JPY on Monday as Japanese markets are closed on account of Coming of Age Day.

 

The market participants' risk appetite has risen further as the S&P500 futures have extended their upward ride in early Monday trading. In addition, the US Dollar Index (DXY) is sensing more offers following President Evans' less aggressive speech at the Chicago Federal Reserve (Fed). The USD Index has prolonged its decline to roughly 103.35 and is anticipated to fall further to the six-month low near 103.00.

 

Evans, president of the Chicago Fed, was quoted in the Wall Street Journal (WSJ) as saying, "It was likely that economic statistics would justify a 25 basis point hike in the policy rate at the Fed's next meeting," as reported by Reuters.

 

According to Reuters, Atlanta Fed bank president Raphael Bostic stated on Friday that the Federal Reserve's actions will depend on how the economy develops. In addition, he cautioned that "The US economy is unquestionably weakening," as a result of a considerable decline in operations in the housing and interest rate sectors. On policy rate estimates, the Fed policymaker predicts a terminal rate above 5% and a continuance of peak policy rates into CY2024.

 

As reported by Reuters, Japanese Prime Minister Fumio Kishida stated on Sunday that his administration and the Bank of Japan (BoJ) must reconsider their partnership in steering economic policy once he appoints a new BoJ governor in April. In a move that would pave the way for an escape from the BoJ's ultra-loose monetary policy, he said that the government may rethink its decade-long plan with the BoJ to combat deflation.

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