• #Layer2 USD/JPY closed Wednesday at 148.34, up by 0.33%.

  • Fed kept rates steady but signalled high rates will be kept for longer.

  • Monetary Policy divergences to weaken the JPY.

On Wednesday, the USD/JPY closed with gains above 148.00 as the USD got a boost amid the hawkish Federal Reserve (Fed) stance, which fueled US yields to multi-year highs.

As expected, the US Federal Reserve kept interest rates unchanged at 5.25%-5.50%. Still, it surprised the market with its projections to keep rates at 5.1% for 2024 (revised from 4.6%), and virtually sent a message that it will keep rates at restrictive levels for a longer time. In addition, the projections for rates in 2023, via the so-called dot plots, were kept at 5.6% and signalled one last like in the remainder of the year, and markets are placing bets for it to be in December. 

As a reaction, the short-term US yields rose to multi-year highs, with the 2,5 and 10-year rates advancing to 5.17%, 4.57% and 4.40%, respectively, making the US Dollar gain interest.

On the JPY’s side, eyes are on Friday's Bank of Japan (BoJ) meeting decision.  The bank has already stated that changes to monetary policy won't be considered until local wage and inflation indicators match their projections. However, markets will look for any clues to start discounting a potential lift-off in the near term. In the meantime, as the Fed’s tightening cycle isn’t over yet, divergences between the two banks will continue weakening the Yen unless the BoJ leaves its ultra-dovish stance.

USD/JPY Levels to watch 

Based on the daily chart analysis, a bullish outlook is noted for USD/JPY in the near term. The Relative Strength Index (RSI) stands above its midline in positive territory, further validated by the decreasing red bars on the Moving Average Convergence Divergence (MACD). In addition, the pair is above the 20,100,200-day Simple Moving Average (SMA), indicating that the bulls are in command of the broader picture.

 Support levels: 147.80, 147.10 (20-day SMA), 146.00.

 Resistance levels: 148.50, 149.00, 150.00.

USD/JPY Daily Chart

USD/JPY

OverviewToday last price148.21Today Daily Change0.35Today Daily Change %0.24Today daily open147.86

 

TrendsDaily SMA20146.82Daily SMA50144.15Daily SMA100142.03Daily SMA200137.46

 

LevelsPrevious Daily High147.92Previous Daily Low147.51Previous Weekly High147.95Previous Weekly Low145.9Previous Monthly High147.38Previous Monthly Low141.51Daily Fibonacci 38.2%147.76Daily Fibonacci 61.8%147.67Daily Pivot Point S1147.61Daily Pivot Point S2147.35Daily Pivot Point S3147.19Daily Pivot Point R1148.02Daily Pivot Point R2148.18Daily Pivot Point R3148.43#opbnb #crypto2023 #ETH #BTC