The USD/JPY currency pair pushed to 154.36 on Tuesday, up sharply and just a step away from a new ten-month high. This break indicates that the duo is persisting on its path upward. Though rough around the edges, investors are experiencing a revival of risk appetite and Japanese fiscal policies appear increasingly aligned with driving a weaker yen. It is possible that the USD/JPY will test 155.70 in the near future, according to analysts. This bullish advance is predicated on maintaining important supportive price levels.
In order to get up toward the expected 155.70 target, the USD/JPY needs to stay bid above important support near 153.80. Recent market developments suggest a particularly strong signal line. Staying well above zero, it is currently on a strongly rising trend, demonstrating continuing bullish pressure for the currency pair. Japan’s current account surplus, which was at an all-time high of ¥4.5 trillion in September, has led the recent spike. Importantly, robust export growth played a role in this remarkable economic performance as well.
The bigger economic context going forward in Japan is critical to determining how the USD/JPY pair may behave going forward. Meanwhile, the Japanese government is expected to approve a fresh economic stimulus plan on November 21. This plan, spearheaded by Sanae Takaichi’s cabinet, aims to urge the Bank of Japan to prioritize economic growth while balancing price stability. Economic Recovery Minister Minoru Kiuchi has pointed out that the domestic challenges posed by the currency’s weakness could amplify inflationary pressures by increasing import costs.
Market sentiment has been boosted by the increasing positive mood regarding the extended US government shutdown. Despite the uncertainty, investors seem hopeful that the shutdown will be resolved within a matter of days. This sense of optimism has caused demand for traditional safe-haven assets, such as the Japanese yen, to decrease. As risk appetite increases, the USD/JPY pair continues to receive strong support from these changing market forces.