2025.01.17 [January 17] USDJPY drops below 155 on Bank of Japan rate hike expectations and U.S. rate cut expectations
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Recap of previous trading day (January 16)
Yesterday the USDJPY reached a high of 156.53 shortly after GMT 00:30, then fell to the lower 155-yen range following reports of expectations for an additional Bank of Japan rate hike, and subsequently traded in the upper 155-yen range.
Around GMT 15:00, Fed Governor Waller mentioned the possibility of rate cuts in the first half of the year, triggering selling in the market. The USDJPY hit a low of 155.08 at GMT 21:30 and closed at that level.
Recap of the Tokyo market and outlook going forward
Today the USDJPY hit a low of 154.97 shortly after GMT 00:30, then reached a high of 155.49 around GMT 04:00, and continues to trade higher.
Looking at the 1-hour chart of the USDJPY (as of GMT 04:00 January 17), it briefly reached +1 standard deviation but is trending downward. If it breaks below 155 again, it appears likely to aim lower.
(20-period Bollinger Band, showing ±1 and ±2 standard deviations)
Today's main economic indicators are as follows.
- GMT 13:30 U.S. December Housing starts
- GMT 13:30 U.S. December Building permits
- GMT 14:15 U.S. December Industrial production
- GMT 21:00 U.S. November Total net TIC flows
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