empty
21.02.2025 01:34 PM
USD/JPY: Inflation, Kato's Statement, and the Outlook for a Downward Trend

The USD/JPY pair hit a nearly two-month low, reacting to Japan's January inflation report, but then sharply reversed following an unexpected statement from Finance Minister Katsunobu Kato.During Friday's Asian session, the pair dropped to 149.30 (the Kijun-sen line on the weekly chart) as traders reacted to inflation data that exceeded even the most optimistic forecasts. All key components of the report came in stronger than expected, reinforcing concerns about persistent price pressures.

This image is no longer relevant

Despite the strong inflation figures, sellers failed to push USD/JPY below the 149.30 support level and into the 148.00 range. The pair unexpectedly reversed and climbed back to the 150.00 level, largely due to Kato's comments, which put pressure on the yen. This allowed buyers to reclaim part of their lost positions.

However, trusting this rebound may not be advisable. The inflation report will remain a key factor influencing the market, and hawkish signals from the Bank of Japan (BoJ) continue to suggest further rate hikes. Additionally, strong GDP growth in Q4 and expectations for higher wage increases following Japan's spring wage negotiations (Shunto) further bolster the case for a tighter BoJ policy.

According to the latest data, Japan's headline Consumer Price Index (CPI) jumped to 4.0% y/y in January, surpassing forecasts of 3.8%. This marks the strongest inflation rate since January 2023 and the third consecutive month of acceleration.

The core CPI, which excludes fresh food prices, also exceeded expectations, rising to 3.2% y/y (vs. a forecast of 3.1%), reaching its highest level since June 2023. Inflation, excluding both food and energy, accelerated to 2.5% y/y, up from 2.4% in the previous month.

A breakdown of the report shows that electricity costs surged by 18%, while food prices jumped by 7.8%, the highest pace in 15 months. Clothing prices rose 2.8%, household goods increased 3.4%, and transportation and medical services also saw price gains. The only categories that saw slight declines were communication services (-0.3%) and education (-1.1%).

This strong inflation report reinforces the hawkish stance of BoJ policymakers. According to a Reuters survey, nearly 70% of economists expect the BoJ to raise rates by 25 basis points in Q3 2024, likely in May or June. However, this survey was conducted before the latest inflation release, which means market focus will now shift to the March BoJ meeting for potential signals on earlier action.

In addition to inflation, Japan's Q4 GDP data recently showed a 0.7% q/q expansion, the fastest pace since Q2 2023. On an annualized basis, GDP growth hit 2.8%, far exceeding the consensus forecast of 1.0%. These figures suggest that Japan's economy remains resilient, providing further justification for a monetary policy shift.

Kato vs. Takata: Diverging Views on Policy

Had Kato not expressed concerns about higher rates potentially pressuring Japan's financial system, USD/JPY might have already tested the 148.00 support level (lower Bollinger Bands line on the daily chart). However, his comments caused hesitation among yen buyers.

This contradicts the hawkish stance of BoJ board member Hajime Takata, who just two days ago advocated for continued tightening to prevent overheating and excessive price growth. Notably, Takata made these remarks before the inflation data release, suggesting that his next comments might be even more assertive.

Adding to the hawkish sentiment, BoJ Governor Kazuo Ueda also emphasized today that higher rates in the long run would support financial institutions' profitability, signaling a willingness to gradually normalize monetary policy.

USD/JPY Technical Outlook

Despite the recent bounce, USD/JPY remains in a bearish setup on both the H4 and daily timeframes, staying below the middle and lower Bollinger Bands lines.

On the D1 chart, the Ichimoku indicator continues to show a bearish "Bearish Cross" signal.

Key downward targets remain unchanged:

  • 149.20 (Kijun-sen line on the weekly chart)
  • 148.00 (lower Bollinger Bands line on D1)

The fundamental backdrop favors further downside, reinforcing the case for a continued downtrend in USD/JPY.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

USD/JPY. La inflación en Tokio se acelera, pero el yen sigue siendo vulnerable

El informe publicado hoy sobre el crecimiento de la inflación en la capital de Japón resultó estar en la "zona verde". La publicación permitió a los vendedores del par usd/jpy

Irina Manzenko 12:25 2025-03-28 UTC+2

Análisis del par GBP/USD. El 28 de marzo. La libra no tuvo tiempo de caer, pero volvió a subir.

El par de divisas GBP/USD volvió a cotizarse al alza el jueves, aunque hace unos días comenzó una especie de corrección bajista. El mercado incluso reaccionó a un informe débil

Paolo Greco 07:24 2025-03-28 UTC+2

Análisis del par EUR/USD. 28 de marzo. A Donald Trump le gusta hacer sorpresas.

El par de divisas EUR/USD mantuvo una inclinación bajista durante el jueves, pero se negoció al alza durante el día. La volatilidad volvió a ser baja, lo que indica

Paolo Greco 07:24 2025-03-28 UTC+2

USD/JPY. El yen se devalua a la espera del informe sobre el crecimiento del TCPI

El par usd/jpy mantiene el potencial de un mayor crecimiento. El informe sobre el crecimiento del TCPI, que se publicará el viernes, o bien reforzará la tendencia alcista, o provocará

Irina Manzenko 12:13 2025-03-27 UTC+2

Donald Trump volvió a confundir a todos

Ayer, el presidente de EE.UU., Donald Trump, declaró que planea una serie de excepciones a su amplia propuesta de aranceles, lo que se convirtió en la última insinuación velada sobre

Jakub Novak 08:45 2025-03-26 UTC+2

El jefe del Banco de Inglaterra contra los aranceles y a favor del desarrollo de la IA

La intervención de ayer del gobernador del Banco de Inglaterra, Andrew Bailey, solo abordó parcialmente la economía del Reino Unido y sus perspectivas. Hablando durante una conferencia en la Universidad

Jakub Novak 08:17 2025-03-25 UTC+2

GBP/USD. Una semana importante para la libra

La libra espera acontecimientos importantes y significativos. El miércoles se publicará el informe clave sobre el crecimiento de la inflación en el Reino Unido, así como la intervención

Irina Manzenko 12:22 2025-03-24 UTC+2

El ataque a la estación de medición de gas Sudzha solo provocó un aumento temporal de los precios

Los precios del gas natural en Europa registraron un fuerte repunte debido a un ataque contra una estación de bombeo inactiva en la región de Kursk, Rusia. Según

Miroslaw Bawulski 10:29 2025-03-24 UTC+2

Los mercados atrapados en un círculo vicioso sin salida por ahora (posible caída del Bitcoin y del precio del oro)

Los mercados están en estado de confusión debido a la enorme cantidad de noticias negativas que se ciernen sobre ellos sin un final claro a la vista. En este contexto

Pati Gani 11:13 2025-03-20 UTC+2

Análisis del par GBP/USD. El 17 de marzo. El mercado se ha dormido, la economía no le interesa a nadie.

El par de divisas GBP/USD el viernes "murió" definitivamente. En la ilustración a continuación se puede ver claramente que la volatilidad fue bastante alta en los primeros tres días

Paolo Greco 07:03 2025-03-17 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.