Dollar Yen Jumps on Hawkish Fed & Rising Yields

US Dollar/ Japanese Yen (USD/JPY) Price Outlook:

• USD/JPY rises to above 135.00 after Fed officers push for larger charges.
• US Dollar Index (DXY) erases 2023 losses, pushing costs above 104.00 towards a basket of foreign currency.
• Japanese Yen (JPY) faces recent basic and technical headwinds after USD breaks larger forward of a protracted weekend within the United States.

USD/JPY Rises to Fresh High as Fed Officials Push for Higher Rates

USD/JPY has risen to its highest stage in two months after extra hawkish chatter from Fed official boosted demand for the higher-yielding Dollar.

With January’s PPI (producer worth inflation) information highlighting the need for larger charges, persistently excessive ranges of inflation have positioned strain on the Federal Reserve to lift charges additional, driving USD/JPY larger.

As officers of the Federal Reserve continued to reiterate their dedication to tame worth pressures via restrictive financial coverage, a compelling case for one more 50 basis-point fee hike on the March FOMC has supported Dollar/Yen power.

Source: Refinitiv

While the repricing of fee expectations has allowed the US Dollar index (DXY) to erase the present 12 months’s losses, the resurgence of Dollar power has weighed on the foremost forex pair, driving costs to a recent 2023 excessive at 135.116.

Although Tuesday’s nomination of Kazuo Ueda as a possible successor to the present BoJ (Bank of Japan) Governor Haruhiko Kuroda offered a slight reprieve for the Japanese Yen, losses have been restricted after the pair fell to a different zone of technical help at 131.500.

USD/JPY Daily Chart

Chart ready by Tammy Da Costa utilizing TradingView

USD/JPY Technical Analysis

With USD/JPY rebounding above the 61.8% Fibonacci of the 2020 – 2022 transfer at 132.554, the pair has continued to commerce larger, pushing worth motion above the prior January excessive at present help of 134.774.

On the every day chart under, the formation of the dying cross on the every day chart has supported the bearish transfer, drawing consideration to a different zone of technical help at 131.500.

If costs proceed to carry above this stage and stay above the psychological stage of 133.00, the chance for larger charges may proceed to drive Dollar Yen power.

USD/JPY Price Levels

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and comply with Tammy on Twitter: @Tams707